Country Garden Services to Unload Stake in Wanda Mall Business for $450M

The property services arm of troubled Chinese developer Country Garden has agreed to sell a 1.49 percent stake in Wanda Group’s mall management unit for RMB 3.14 billion ($450 million).

The disposal by CGS HK, a wholly owned Hong Kong subsidiary of Country Garden Services, will leave the company with a 0.31 percent stake in Zhuhai Wanda Commercial Management Group, according to a Wednesday stock filing. The buyers are Wanda affiliates.

The transaction comes after a consortium of investors led by private equity giant PAG took control of Zhuhai Wanda in mid-September, nearly six months after announcing an $8.3 billion buyout of the business. Country Garden, meanwhile, has been seeking an extension from its creditors for nine onshore bond payments after defaulting on $11 billion in offshore debt last year.

“The disposal represents a good opportunity for the group to strategically focus and curtail its financial investments by selling back the shares in accordance with the investment exit schedule, which helps the group to recover capital and concentrate on the operation of the group’s core businesses,” Country Garden Services said in the filing.

Cash Transfer

The consideration for the 1.49 percent stake is to be paid in cash in a US dollar equivalent amount of RMB 3.14 billion within 10 working days from 27 September 2024, said Country Garden Services — which, like Country Garden, is chaired by Yang Huiyan, the daughter of company founder Yang Guoqiang.

After deducting the initial investment cost of the stake, the remaining RMB 461.1 million ($65.6 million) will be credited to the retained profits of Country Garden Services, resulting in a same-size increase in net asset value, the company said.

“As the equity investment in the target company is recognised as an equity investment at fair value through other comprehensive income, the gain on the disposal will not be included in profit or loss,” it said. The proceeds will go to general working capital and other purposes approved by the board.

Late last year, Foshan-based Country Garden sold its entire 1.79 percent stake in Zhuhai Wanda for RMB 3.07 billion (then $428 million).

Nanjing Theme Park Sold

This week also brought news that Wanda’s indoor theme park in Nanjing had changed hands, with corporate registry records showing the holding company for the asset having increased its registered capital from RMB 100 million to RMB 1.4 billion.

Opened in 2018 and spanning 307,000 square metres (3.3 million square feet), the mall and indoor park were purchased by Xinhua Life Insurance Co through a vehicle managed by mainland investment bank CICC, according to Chinese media accounts.

The complex was Wanda’s first large-scale cultural tourism project in Nanjing and cost RMB 15 billion to build, The Paper reported.