R& F Properties alters Wanda- Sunac deal by taking over hotel portfolio

Dalian Wanda Group has sold 13 cultural and tourism projects to Sunac China Holdings as previously reported while its 77 hotels were acquired by newly emerged player R& F Properties under an acquisition agreement signed by the three parties on Wednesday in Beijing.

R& F Properties, a developer based in Guangzhou, South China’s Guangdong Province, will pay 19.91 billion yuan ($ 2.95 billion) to take over the 77 hotels. A 91 percent stake in Wanda’s 13 cultural and tourism project companies worth 43.84 billion yuan will go to Sunac, according to a note Wanda sent to the Global Times Wednesday.

Wanda Chairman Wang Jianlin said during the signing ceremony that the transaction involving these “heavy assets” can reduce the company’s high liability ratio by injecting a large amount of cash, marking its transformation to a “light asset” model for both its commercial properties and cultural tourism projects.

Sun Hongbin, chairman of Sunac, the Tianjin- based property company, said that the adjustment will mean better liquidity for Sunac than would have been the case under the previous Wanda- Sunac deal and bring down the liability level of Sunac, said the statement.

“The current dealing price satisfies all three parties,” Sun said.

He also noted that Sunac will develop more cooperation projects with Wanda in such sectors as cultural tourism and healthcare industry.

According to the previous strategic framework announced by Sunac on July 10, Wanda’s 76 hotels and a major chunk of its 13 tourism projects were priced at 33.6 billion yuan and 29.58 billion yuan, respectively, media reports said.

In terms of the reported capital lending of Wanda to Sunac to finance the deal, Wang said, “Sunac does not need Wanda’s financing to complete the transaction and Sunac has paid 15 billion yuan to Dalian Wanda Commercial Properties Co.”

Wang also gave details on Wanda’s fi nancial status.

“After the transaction, Wanda’s ans and bonds will reach nearly 200 llion yuan. The newly gained cash om this transaction will be 68 bilon yuan,” Wang noted. “Added to the company’s cash on and of 100 billion yuan, it will total out 170 billion yuan,” Wang said, oting that Dalian Wanda Commer-ci al Properties Co has decided to reay most of its bank loans. “R& F Properties’ involvement is ally like a bomb in terms of the news effect and the acquisition itself,” Yan uejin, research director at Shanghaiased E- house China R& D institute, ld the Global Times on Wednesday As a sustainable growing enter-prise, R& F Properties is unfamiliar ith the hotel sector, yet the decision buy Wanda’ s hotels indicates it olds an optimistic view toward the evelopment of the hotel industry, an said.