3 billion! Wang Jianlin solves Country Garden's urgent need for funds, and Wanda's old shareholders Sunac and Suning are still waiting for "unraveling"
Tencent News "Periscope" author Guo Yifei
Although Wang Jianlin temporarily extricated himself from the 38 billion yuan listing VAM, the aftermath of this incident is still ongoing, and many mysteries still need to be solved, including the exit and who are the new investors, the current valuation of Zhuhai Wanda Commercial Management, when it will be listed in the future, and how to protect the interests of the old shareholders of Dalian Wanda Commercial Management.
The first person to hurriedly withdraw from this "capital feast" was Country Garden, a peer in a deep debt crisis.
On December 14, Country Garden announced that it would sell all the 1.79% shares it held in Zhuhai Wanda Commercial Management, totaling about 3.0685 billion yuan, and the buyer was Wang Jianlin, who undertook the VAM repurchase obligation. The sale proceeds will be paid in three instalments, namely $657 million, $36 million and $2,375 million.
Country Garden said that this transaction can lock in a more suitable transaction price and exit path in advance, so as to avoid major uncertainties in the timing and amount of future exits, and effectively protect the value of the company's strategic investment equity assets.
As early as July 2021, Yang Guoqiang, the founder of Country Garden, invested 3.23 billion yuan to participate in Zhuhai Wanda Commercial Management through Country Garden's Jinyi Global and Country Garden Property, and each held 1.79% of the shares. Although the announcement stated that the above-mentioned single selling loss was 160 million yuan, the investment was not a loss after counting the annual dividends and the annualized 8% repurchase interest.
This money can be said to be a solution to the urgent need for Country Garden.
On the evening of December 13, Country Garden announced that it would fully pay the "22 Bidi 02" bonds, with a scale of 800 million yuan. The bonds were originally pledged with the equity of Zhuhai Wanda Commercial Management as collateral. People close to Country Garden told Tencent News "Periscope" that this move is a "blood return" and effectively replenishes short-term liquidity, but the company's liquidity pressure still exists.
Country Garden also said in the announcement that the first tranche of funds will be used to settle the pledged related debts, and the rest of the funds will be used for overseas debt restructuring.
Compared with Country Garden's "lucky" solution, Sunac, which is the old shareholder of Dalian Wanda Commercial Management and Wanda's old peers, as well as Suning and JD.com, are not in the VAM repurchase list of Zhuhai Wanda Commercial Management at the end of the year. According to Tencent News "Periscope", they are still trapped in this Wanda Capital Bureau.
The valuation of Zhuhai Wanda Commercial Management declined, and Lao Wang exchanged 30 billion in cash
On December 13, Yonghui Supermarket announced that it planned to sell about 390 million shares of Dalian Wanda Commercial Management at a transfer price of about 4.53 billion yuan, the buyer was Dalian Yujin Trading Co., Ltd., and the actual controller was Sun Shuangxi, a friend of Wang Jianlin for many years.
The above-mentioned equity is actually 67.91 million shares purchased by Yonghui from Dalian Yifang in December 2018, and the transfer price is 3.531 billion yuan. Sun Shuangxi is also the actual controller of Dalian. It is equivalent to going around in a circle, and the equity of Dalian Wanda Commercial Management has returned to the hands of Sun Shuangxi.
As the richest man in Liaoning, Sun Shuangxi claimed to have invested in Wanda as early as 1993, and has had in-depth cooperation with Wang Jianlin in many projects such as Centennial Life, Wanda Film, Changbai Mountain Resort, and Dalian Football Club. In 2014, when Wanda Commercial Real Estate IPO on the Hong Kong Stock Exchange, Sun Xishuang held 6.3% of the shares, and was the only natural person shareholder holding more than 5% of the shares.
As of the end of the third quarter of 2023, Dalian Wanda Commercial Management's total assets were 611.6 billion yuan, net assets were 308.2 billion yuan, and liabilities were 303.4 billion yuan. According to the consideration of Yonghui Supermarket, the valuation of Dalian Wanda Commercial Management is 316.8 billion yuan.
It is worth noting that the main body of this listing is Zhuhai Wanda Commercial Management, whose valuation at the time of its pre-IPO is 180 billion yuan, which is the valuation level of PAG, PAG, Country Garden and other investment institutions in July and August 2021.
According to the transaction consideration of Country Garden, the latest valuation of Zhuhai Wanda Commercial Management is about 171.4 billion yuan.
In March 2021, Wang Jianlin spun off all asset-heavy projects from Wanda Commercial Management Group, including Wanda Plaza, supporting residences, hotels, office buildings, etc., and only retained the pure commercial asset-light operation business, and established the current Zhuhai Wanda Commercial Management. On the one hand, it provides operational services for all Wanda Plazas developed by its parent company, Wanda Group, and on the other hand, it expands to independent third-party commercial projects and exports the brand and management experience of Wanda Plaza stores.
Zhuhai Wanda Commercial Management is the only business platform for the asset-light operation and management of the commercial center of Dalian Wanda Commercial Management Group, which also owns heavy assets such as Wanda Plaza, which is why its overall valuation is still higher than that of Zhuhai Wanda Commercial Management.
As of November 2023, Zhuhai Wanda Commercial Management operates a total of 494 commercial centers, including 290 under Dalian Wanda Commercial Management and 204 third-party commercial centers.
Now, in order to get rid of the pressure of 38 billion yuan of VAM repurchase, Wang Jianlin exchanged equity for funds, and Dalian Wanda Commercial Management's shareholding ratio in Zhuhai Wanda Commercial Management dropped sharply from 78.83% to 40%, which also means that it has lost absolute control, or it may also bury hidden dangers in corporate governance in the future.
People close to Wanda confirmed to Tencent News "Periscope" that Dalian Wanda Commercial Management has also successively obtained incremental funds of nearly 30 billion yuan, and at the same time, the asset-light operation model of the two sides will be further optimized, and the entrusted management fee paid by Dalian Wanda Commercial Management to Zhuhai Wanda will also be significantly reduced.
"There is no point in forcing Lao Wang to buy back, and now the ending is an ideal result. A Wanda regional executive told Tencent News "Periscope" that time is exchanged for space, and when the market is good in the next two or three years, the business management will continue to be listed.
He believes that at that time, the property sector in Hong Kong stocks had the highest price-earnings ratio of 40-50 times, and the valuation of two or three hundred billion yuan at every turn, and light asset management companies such as Zhuhai Wanda Commercial Management should be more recognized - stable cash flow, with the increase in the area under management and the expansion of performance, the revenue will do better, and the net profit of 10 billion yuan per year, even if the price-earnings ratio is 20-30 times, the valuation will reach 300 billion, and it can be safely landed. But now I can't get on it for a few years, and I feel like the boss has figured it out.
Previously, Bloomberg quoted sources as saying that Zhuhai Wanda Commercial Management proposed to issue new shares at a valuation of about 100 billion yuan. Caixin said that after the restructuring transaction, the company's valuation shrank by at least 40%, reducing to about 110 billion yuan to 120 billion yuan.
There is no VAM agreement, and old shareholders such as Sunac and Suning have not withdrawn at present
Seeing that this expected capital feast has not yet arrived, those who want to quit the market are not only Country Garden, but also Sunac and Suning, which are also facing debt problems. But to be precise, these two are not shareholders of Zhuhai Wanda Commercial Management.
In January 2018, before Wang Jianlin's move to the asset-light platform, Tencent, Suning, Sunac and JD.com invested a total of 34 billion yuan to acquire about 14% of the shares held by investors introduced by Wanda Commercial Hong Kong's H-share delisting, with the shareholding ratios of 4.12%, 3.91%, 3.91% and 2.06% respectively.
At that time, The Paper reported that the investment was still subject to a VAM agreement, and Wanda Commercial would complete the listing by October 31, 2023. However, a person familiar with the matter told Tencent News "Periscope" that in 2018, JD.com, Suning, and Sunac invested in Dalian Wanda Commercial Management, which was not within the scope of the VAM agreement that expired at the end of the year for Zhuhai Wanda Commercial Management, and has not yet withdrawn.
According to the prospectus updated by Zhuhai Wanda Commercial Management for four times, Suning, Sunac and JD.com did not appear among the 16 external institutional investors, PAG PAG, Zheng Yutong family, Country Garden, Tencent, Ant, CITIC Capital, United Life Insurance, Warburg Pincus, etc.
Regarding how to protect the interests of the above-mentioned old shareholders, people close to Wanda told Tencent News "Periscope" that they do not know the decision-making matters of Yonghui Supermarket to sell its shares, as well as the shareholders of JD.com, Suning and other companies.
At the same time, there are still many people who continue to be deeply bound to Wang Jianlin and seek future listing.
"This new agreement reflects our confidence in Zhuhai Wanda's growth potential and its management capabilities," PAG, the white knight who saved Wang, wrote in a press release on its website.
The core figure behind PAG is Shan Weijian, who has always maintained a buy-out investment style. He once publicly stated to the outside world, "The ability to find the best management for the company is the key to success, and sometimes even more than one change." ”
Obviously, this style conflicts with Wang Jianlin's "military" and strong control style. However, to the relief of the outside world, PAG said that "Dalian Wanda, PAG Group and other major shareholders have promised to further improve the governance of Zhuhai Wanda and maintain the stability of the management team." ”
Caixin reported that along with Shan Jianwei, foreign investors from the Middle East also increased their positions and entered the market.