Losing absolute control, Wang Jianlin compromised
Losing absolute control, Wang Jianlin compromised.
Text: "Chinese Entrepreneur" reporter Li Yanyan
Edited by Yao Yun
Header image source: Visual China
Wanda ushered in a key turnaround.
"China Entrepreneur" learned from Wanda that on the morning of March 30, Dalian Wanda Commercial Management Group, PAG Investment Group, Abu Dhabi Investment Authority, Mubadala Investment Company, CITIC Capital, and ARES held a signing ceremony at the Shangri-La Hotel in Dalian.
According to the agreement signed between Wanda and the investors on the same day, Dalian Xinda Alliance will receive an investment of about 60 billion yuan from the investors. "Dalian Xinda Alliance" is a newly established company established by Wanda in January this year, and after the capital injection, Dalian Wanda Commercial Management holds 40% of the shares, and Taimeng and other investors and shareholders hold a total of 60% of the shares.
It is understood that this investment is the largest private equity investment in China in the past five years. However, this signing, which is regarded by the outside world as Wanda's "life money", did not appear at the venue of Wang Jianlin, chairman of Wanda Group.
When industry peers are in the throes of "going out of danger", tens of billions of war investment is a distant phantom of the "golden age". Wanda's aid funds arrived on schedule, which is inseparable from Wang Jianlin's vertical and horizontal cooperation, which of course shows his popularity and huge network of contacts, to a certain extent, this is also a compromise after weighing - Wang Jianlin, who has always been strong and advocates "iron fist" management, has lost absolute control.
In order to relieve the listing VAM crisis, Wang Jianlin, who has not yet opened the door to listing, chose to "exchange shares for money". China Entrepreneur learned from relevant people close to PAG and CITIC Capital that there is no VAM clause for this new investment, and there is no clear agreement on the listing time;
At least in this new company, Wang Jianlin's voice has been weakened. Relevant sources said.
Source: Wanda Group
"After years of business war, wealth has always been in vain. Many years ago, Wang Jianlin wrote this poem, and after several ups and downs, this poem has become an important footnote. In the past two years, Wang Jianlin, who was trapped in the pressure of Hong Kong stock IPOs and gambling, was in constant trouble and running around. Under the pressure of debt, the company frequently sells core assets such as Wanda Plaza, hotels, and movies.
Under heavy pressure, how will Wang Jianlin, who is about to usher in the age of ancient scarcity, end?
Loss of "absolute control"
At the signing ceremony, Wang Jianlin did not show up, and the executives who signed the contract on behalf of Wanda were Qi Jie, President of Wanda Group, and Xiao Guangrui, President of Wanda Commercial Management Group. In addition, a number of local officials from Dalian City also attended. According to the official press release, "this investment is an important achievement of Dalian in the near future to expand the use of foreign investment channels, and will be fully supported and guaranteed by the Dalian municipal government in the future." ”
It is worth noting that the main body of this investment is "Dalian Xinda Alliance Commercial Management Co., Ltd." (i.e., Dalian Xinda Meng). This is a newly established holding company, and its subsidiary is Zhuhai Wanda Commercial Management, which is actually the operation and management platform of the commercial plaza. Tianyancha data shows that the company was registered in January 2024, and its legal representative is Xiao Guangrui.
"The independent development of 'Suntec Alliance' is a prerequisite for them to participate in investment. To a certain extent, the new company has departed from Wanda's framework and adopted modern corporate governance. A person close to PAG said. Wanda said that after the introduction of new strategic investment, Dalian Xinda Alliance will further optimize the company's independent corporate governance, more effectively motivate the management team, improve its operating ability and growth potential, and ensure its long-term development.
On 12 December 2023, in response to the VAM crisis, PAG and Dalian Wanda Commercial Management Group announced that they had signed a new investment agreement under which PAG and other investors would reinvest in Zhuhai Wanda Commercial Management after redemption by Dalian Wanda Commercial Management Group upon the expiration of its 2021 investment redemption period. Now this 60 billion yuan investment is the implementation of this new agreement.
Wanda Commercial Management's VAM problem originated in 2021, when 22 investors, including the Zheng Yutong family, Country Garden, CITIC Capital, Ant, Tencent, and PAG, invested about 38 billion yuan in Zhuhai Wanda Commercial Management, and the investors enjoyed the right of redemption at maturity. The agreement stipulates that Zhuhai Wanda Commercial Management will be listed in 2023 at the latest, otherwise Wanda Commercial Management will have to repurchase shares from investors and pay additional compensation.
However, the road to the listing of Wanda Commercial Management has been full of twists and turns. Since submitting the form in October 2021, Wanda has submitted the form four times and failed it four times. On December 28, 2023, the prospectus submitted by Zhuhai Wanda Commercial Management on the Hong Kong Stock Exchange became invalid again. Tens of billions of repurchase money is not a small amount, coupled with the downturn in the industry and the lack of smooth recovery, Wanda urgently needs a new plan. At this juncture, Wang Jianlin found the helper, PAG Investment Group.
Previously, Dalian Wanda Commercial Management held 78.83% of the shares of Zhuhai Wanda Commercial Management, the main body of the listing. According to the new agreement, after this adjustment, its shareholding will be reduced to 40%, but it will be the single largest shareholder. At the same time, several existing and new investors, including PAG, participated in the investment, and the total shareholding increased to 60%. On the issue of listing, VAM agreements are no longer set up for new investments.
According to the estimation of the rating consulting agency "YY Rating", excluding withholding tax and dividends, the scale of Wanda's potential buyback expenditure is as high as 44 billion yuan. According to the latest calibre, several existing shareholders such as PAG may not execute the redemption right at maturity, and although Wang Jianlin's VAM risk has been temporarily alleviated, he has lost absolute control over Zhuhai Wanda Commercial Management.
"The price of this investment is that Dalian Wanda Commercial Management has lost its absolute controlling stake in Zhuhai Wanda Commercial Management, which may affect the company's future strategic direction and decision-making, but Wanda is still the leading party and actual controller of the operation, and it is not ruled out that Wanda will regain its absolute controlling stake in the future. Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, said.
In his view, in the future, Wanda still needs to carry out in-depth thinking and adjustment in financial management, market strategy and long-term development.
Break through the hurdles and continue to "slim down"
The "Dalian Xinda League", which has become a "sweet and sweet", once encountered a storm of equity freezing.
Not long ago, Wanda Commercial Management added a new information on equity freezing, involving an amount of about 16.2 billion yuan, and the enterprise whose equity was executed is Dalian Xinda League, with a freezing period from March 20, 2024 to March 19, 2027, and the enforcement court is the Hanjiang District People's Court of Yangzhou City, Jiangsu Province.
It is understood that the equity freeze is due to a dispute between Wanda's project and a bank over an operating loan, and Wanda has reached an agreement with the bank on the dispute. According to information on March 29, about 16.2 billion yuan of Dalian Xinda League's equity was unfrozen on March 25.
In addition, according to the website of the National Enterprise Credit Information Publicity System, on March 4, Zhuhai Wanda Commercial Management Group Co., Ltd. added a new information on equity freezing, and the person subject to execution was Dalian Wanda Commercial Management Group Co., Ltd., with an amount of about 5.072 billion yuan in frozen equity.
The issue of equity freezing reflects Wanda's long-standing liquidity problems. According to the data, as of the end of June 2023, Dalian Wanda Commercial Management's consolidated interest-bearing liabilities were 141.28 billion yuan, of which 29.26 billion yuan were due within one year, and only 16 billion yuan of monetary funds were left. During the same period, the company's total revenue was about 25.5 billion yuan, a year-on-year increase of 4.3%, and the net profit attributable to the parent company was about 6.7 billion yuan, a year-on-year increase of 0.43%.
In the past 30 years, Wang Jianlin in the mall has gone through many twists and turns, and he can always survive in the Jedi. The moment of "broken arm" 5 years ago still amazes the industry. In 2017, under the background of strict control of the domestic real estate industry, Wanda, which is rapidly expanding globally, was suddenly hit by a "double kill of stocks and bonds" and was investigated by the China Securities Regulatory Commission for credit risk. In order to alleviate the liquidity crisis, Wang Jianlin successively sold off his hotels and cultural tourism projects, and gave up a large number of overseas assets.
In more than one year, Wanda has paid off more than 200 billion yuan of debt.
At that time, the broken arm survived, although it brought pain and controversy to Wang Jianlin, but he won the opportunity to recuperate. Some people even joked that Wang Jianlin has become the person Xu Jiayin envies the most. The current Wang Jianlin, compared with the label and crown of "the richest man", perhaps the light-armed Wanda Commercial Management is more important to him. This is not only the basic plate for him to restart his career, but also the main battlefield for seeking asset-light transformation.
Since last year, Wang Jianlin, who has been trapped in the pressure of Hong Kong stock IPOs and gambling, has been in trouble and running around, while Wanda has also continued to "slim down" and frequently sell core assets. From 2023 to the present, Wanda Commercial Management has intensively sold its Wanda Plaza. According to incomplete statistics, since 2023, the company has sold a total of 14 Wanda Plazas. It is reported that Wanda Group is considering selling its 20 commercial centers, each with a valuation of 700 million ~ 800 million yuan.
Source: Visual China
Wanda Plaza is Wang Jianlin's home stadium. He once said that Wanda can lose any enterprise, only Wanda Commercial can not lose, just this one enterprise "Wanda Group can let the wind and waves rise, sit firmly on the fishing boat". From a real estate businessman who "invested in building a building" to a "second landlord", Wang Jianlin made money with his business management and service capabilities. Today, Wanda manages nearly 500 commercial plazas across the country.
In the 2023 semi-annual report, the company reminded that due to the impact of the lack of recovery of refinancing channels in the open market and the lower than expected progress of Zhuhai Wanda's listing, bond prices have further fluctuated, and the difficulty of refinancing has increased. At the end of last year, the relevant shares of Wanda Hotel and Wanda Film were changed. Among them, Wang Jianlin sold 20% of the equity of Wanda Film to China Ruyi, retired as the second largest shareholder, and returned nearly 9 billion yuan in total.
Starting from 2021, the "Wanda Spring Festival Gala" is no longer a lively event, and Wang Jianlin, who does not sing rock and roll, is becoming more and more low-key. It is understood that in January this year, Wang Jianlin attended Wanda's annual work conference, and he mentioned that one of the tasks in 2024 is to reduce costs and increase efficiency.
The taste of gains and losses may only be experienced by Wang Jianlin himself. He has climbed the mountains and fallen into the trough, but this time he lost part of his voice, but he got the funds, alleviated the debt pressure, and exchanged for the company's long-term space. Of course, the most important thing is that the previous VAM crisis has been resolved, and the investor structure has become more diversified. The company has not only survived, but also ushered in a new turnaround.
It is understood that under the leadership of PAG Investment Group and other existing investors, the new entrants include Middle Eastern capital such as Platinum Peony, a wholly-owned subsidiary of ADIA, and Mubadala Investment Company, Abu Dhabi's sovereign wealth fund. In addition, it includes CITIC Capital and NYSE-listed Ares Management's fund (Ares).
Next, Wang Jianlin and PAG Investment will re-promote the listing of Wanda Commercial Management through the "New Star Alliance". Judging from the current trend, Wanda in 2024 may sell more Wanda Plaza and continue the road of asset-light transformation. Although there are still sighs from the outside world, compared with those real estate developers who are still struggling in the whirlpool of real estate, Wang Jianlin has already taken a step forward, and his only son Wang Sicong has also begun to visit the local area and seriously talk about cultural tourism projects.
Who says what is lost cannot be regained?
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