The conglomerate run by China's richest man is offloading a hefty chunk of its assets to pay down debt. The move suggests a switch to an asset-light mode - virtually unprecedented in China - as well as preparation for a possible stock listing.
Dalian Wanda will sell 76 hotels and a 91% stake in its 13 theme parks to Sunac China, which has itself been on an acquisition spree.
Sunac Real Estate Group will pay 33.6 billion yuan to buy the hotels outright, while parent Sunac China will spend 29.6 billion on the theme-park stake.
The companies plan to sign the final agreement over the sales by the end of July, with payment and the transfer of holdings happening "as soon as possible," Dalian Wanda outlined in a statement on its Web site. Sunac and Wanda now plan to cooperate extensively, including on movies.
Dalian's founder Wang Jianlin is the richest man in China, with a 215 billion yuan fortune, according to the Hurun Report's "rich list."
If it does indeed represent a switch from the traditional approach to building a business empire in China, this sale is unusual. Selling off a money-sucking section of the business that leaves you with depreciating, hard-to-maintain assets may signal more joined-up thinking, which would make Wanda more appealing to international investors.
Theme parks are of course highly capital-intensive. Although Beijing has been encouraging their development and pushing for a stronger domestic tourism industry, there are already around 300 completed theme parks in operation, some good and many terrible, but all struggling to turn a profit.
Offloading the stake in 13 "cultural tourism" parks that include theme parks and leisure complexes will allow Wanda to concentrate capital in other areas while keeping a hand in the business. Wanda was planning another 20 such projects in China, forming what Wang said would be a "wolf pack" to hound out Walt Disney (DIS) .
It proudly notes that it is, as of July 2016, among the ranks of the Fortune Global 500. Inclusion recognizes its transition "from a Chinese real estate company to a global sports, entertainment and tourism giant," Wanda said at the time.
The conglomerate run by China's richest man is offloading a hefty chunk of its assets to pay down debt. The move suggests a switch to an asset-light mode - virtually unprecedented in China - as well as preparation for a possible stock listing.
Theme parks are of course highly capital-intensive. Although Beijing has been encouraging their development and pushing for a stronger domestic tourism industry, there are already around 300 completed theme parks in operation, some good and many terrible, but all struggling to turn a profit.
