Dalian Wanda Group has reached the next milestone in its global retreat as the Chinese investment conglomerate today confirmed the sale of its two Australian properties for the equivalent of A$1.13 billion ($913 million), including A$315 million ($255 million) in equity along with the new owner assuming responsibility for A$815.1 million in debt.
In a statement to the Hong Kong stock exchange Wanda Hotel Development Company notified shareholders that the listed subsidiary of the Beijing-based group had reached an agreement with AWH Investment Group Pty Ltd for transfer of the assets. A report today in The Australian indicated that AWH is controlled by controversial Australian-Chinese political donor Huang Xiangmo
The asset disposal, which had been expected for months had been reported as imminent last week and followed similar asset disposals in the UK and in mainland China by the company controlled by tycoon Wang Jianlin.
Wanda Gives Up Down Under
Under the terms revealed in today’s announcement, Wanda Hotel Development is parting with ownership of the One Circular Quay project along Sydney harbour, which Wang had touted as a $1 billion enterprise when his company acquired the former Gold Fields House office tower from Blackstone for A$415 million ($329 million) in January 2015.
Dalian Wanda Group, which is best known for its chain of mainland malls and hotels, combined that property with adjoining sites acquired from other sellers for what was envisioned as the new hub of Sydney’s harbourfront. One Circular Quay was to include a five-star hotel, a luxury residential skyscraper and commercial space, while the Jewel combined a casino, resort and 512 condo units.
The new owner will also take over Wanda’s 55 percent stake in the Jewel resort project in Surfer’s Paradise which Wang’s firm had purchased from China’s Ridong Group for A$300 million ($278 million) in 2014.
Prime Oz Properties Acquired by Donor in Political Scandal
The sale by Wanda is also set to boost the profile of Huang Xiangmo, an Australian-Chinese property investor linked to a corruption scandal that triggered the resignation of Labour senator Sam Dastyari in December.
AWH Investment Group was set up in November last year, but is reportedly controlled by Huang’s Yuhu Group, which is already planning an A$276 million plan to redevelop a shopping centre in southwest Sydney.
Dastyari resigned in December after it was revealed that he had given Huang counter-surveillance advice on how to avoid detection by Australian intelligence services. Huang’s Yuhu Group had also been revealed as having paid Dastyari’s expenses, among more than A$1 million in donations to Aussie politicians in recent years.
Huang is said to have left China after being linked to a scandal involving corrupt property deals in Jieyang, which brought down the top official in the Guangdong province community in 2014.
Aussie Sale Coincides with O2O Investment
The sale of the Australian assets was announced the same day that Wanda revealed the sale of a 14 percent stake in Dalian Wanda Commercial Properties to a consortium led by Tencent.
Under the terms of that deal, Tencent, along with ecommerce leader JD.com, appliance retailer Suning and developer Sunac Holdings, would be investing $5.4 billion in Wanda to build an online to offline retail giant, while also expanding Wanda’s portfolio of nearly 240 malls to as many as 1,000 centres.
Selling Dreams to Pay Down Debt
Wanda is parting with its Aussie prizes as the company struggles to stay afloat financially after borrowing heavily to expand into new business lines including movie theatres, theme parks, finance, ecommerce and sports over the past five years.
Just over one week ago, Dalian Wanda Group admitted that its revenues dropped 10.8 percent year-on-year to RMB 227.4 billion ($35.5 billion) in 2017, following a 13.9 percent decline in 2016.
At the beginning of this month Wang’s Wanda Network Technology division was reported to be reducing its workforce to 300 from 6000, and in the middle of the month, Wanda sold off what the company had termed a billion-dollar project in London for £59 million ($81.5 million). That sale came just under four years after buying the site in south London’s Vauxhall area for £88.8 million.
Wanda’s Aussie fire sale was announced just days after reports emerged that HNA, another mainland conglomerate which had rushed to acquire overseas assets before reversing course last year, had agreed to sell the 1 York Street office tower in Sydney to a fund controlled by Blackstone for about A$200 million ($161 million).