The Abu Dhabi Investment Authority is considering buying a minority stake in the mall operator of Dalian Wanda Group Co, according to people familiar with the matter, as the unit works to revamp its shareholding structure.
The Abu Dhabi Investment Authority, the emirate's wealth fund, has held preliminary discussions about potentially buying a stake in Zhuhai Wanda Commercial Management Group Co, according to the people who said the fund might buy shares from existing holders.
ADIA's move comes after billionaire Wang Jianlin relinquished control of Zhuhai Wanda last December, as part of an agreement to avoid paying investors ahead of the IPO. Under the terms of the original investments, Wanda agreed to repay investors 30 billion yuan ($4.2 billion) plus interest if Zhuhai Wanda was unable to complete its initial public offering by the end of 2023.
Ownership shares
Private equity firm PAG and other investors collectively own 60% of Zhuhai Wanda, while Wang owns the remaining 40% via another company. BAG invested about $2.8 billion in Zhuhai Wanda in a 2021 financing round. The mall operator was valued at less than 100 billion yuan in a deal in December, less than half its valuation in a financing round three years ago.
While Wang avoided an imminent redemption through the December deal, some investors are still looking to sell back their shares and exit, the people said. They said that Zhuhai Wanda had approached banks for a loan worth 30 billion yuan as reserve liquidity for any potential recoveries.
Securing financing
Country Garden Holdings agreed in December to sell its 1.79% stake in Zhuhai Wanda in exchange for giving about 3.1 billion yuan to the Wanda Group. The Chinese real estate development company expected to record a loss of about 160 million yuan from the sale.
The potential ADIA deal depends on whether Zhuhai Wanda can secure the 30 billion yuan financing from banks, the people said. They added that there is no guarantee that the Abu Dhabi Wealth Fund will go ahead with the deal.
A representative of the Abu Dhabi Fund declined to comment, while representatives of BAG and Zhuhai Wanda did not respond to requests for comment.
Chinese regulators have offered more financial support to developers by expanding access to some business loans, as many struggle to repay debts and complete projects, including giants such as China Evergrande Group and Dalian Wanda, and authorities recently called on local governments. To support developer financing, and prepare a list of eligible projects.
Zhuhai Wanda operated nearly 500 shopping centers across China as of the end of November, including 204 centers through independent third parties, according to a statement in December. The company submitted its application to list on the Hong Kong Stock Exchange for the fifth time in November. Unlike BAG, Zhuhai Wanda has attracted a large list of investors ahead of its IPO, including Ant Group Co, Citic Securities Co and Tencent Holdings Ltd, its preliminary prospectus shows. .
