Wang Jianlin sells most of Wanda hotel and tourism portfolio to rival magnate for US$9.3 billion

Wanda Group, one of China’s most aggressive overseas asset buyers of recent years, has announced the disposal of the majority of magnate Wang Jianlin’s hotel and tourism portfolio to a rival, in the country’s biggest single property transaction, as it raises funds to repay loans.

Wanda said it’s disposing of assets to “fully exercise the competitive industrial advantage” with its buyer, but analysts say the company may be buckling under the scrutiny of China’s banking regulator to pare back on debt.

Together with Anbang Group, Fosun Group and the HNA Group, Wanda was named last month by the China Banking Regulatory Commission for special attention in loans exposure, as the country’s four biggest overseas asset buyers face the equivalent of US$11.5 billion in bonds and loans by the end of 2018, according to Bloomberg’s data.

“Wanda may be feeling the financial pressure, or it won’t need to sell off so many assets,” said Liu Feifan, a property analyst at Guotai Junan International. “Wanda may badly need funding to support its expansion, but can’t count on rental income.”

Wanda already had to abandon a US$1 billion takeover of Dick Clark Production in March, after it failed to obtain regulatory approval to remit funds for the acquisition, incurring a US$50 million breakup penalty.

Wang, one of China’s wealthiest men, also had been planning to transfer the listing status of his flagship company Dalian Wanda Commercial Properties from Hong Kong, where it trades at 4.9 times estimated 2017 earnings, to the Shanghai exchange, where the median ratio is at 15.9 times. He spent HK$34.5 billion (US$4.4 billion) to buy back all of the Hong Kong company’s shares last year for the relisting, but had not made any progress on the transfer.