PAG in 60% Buyout of Wanda Mall Unit in China for $8.3 Billion

A group of investors led by private equity firm PAG on Saturday announced an investment of $8.3 billion for a 60% stake in Chinese property giant Dalian Wanda’s mall unit.

Dalian Wanda will retain 40% in Newland Commercial Management, the holding company of Zhuhai Wanda Commercial Management Group Co, the statement said.

CITIC Capital, the Abu Dhabi Investment Authority, Mubadala Investment Company and Ares Management Corporation were also joint investors in the deal.

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“We like the competitive edge and first mover advantage that Newland has built and we think these advantages will allow it to generate stable and growing cash flow to investors,” said David Wong, partner and co-head of private equity at PAG.

Newland manages 496 large shopping malls across China, the statement said.

In December last year, PAG and Dalian Wanda Commercial Management Group jointly announced the signing of an investment framework to restructure Zhuhai Wanda Commercial Management. The agreement signed on Saturday, implements this agreement, the statement said.

Country Garden home sales plunge

In related news, China’s biggest private developer Country Garden said late on Thursday that it would delay publishing its annual results.

The troubled conglomerate, which has a massive debt load of close to $190 billion, went into default on some of its offshore debt last October.

In a filing to the Hong Kong stock exchange, it said it needed more time to gather information due to the complexity of work required by its debt restructuring.

The group said the Chinese property industry was “volatile” and that made it harder for the company to operate.

The developer’s sales have declined dramatically – in February they plunged by 85%, it said, which is the biggest monthly drop in at least seven years.

It urged its creditors to be patient, but said it continued to work on completing housing projects. In 2023, the company and its joint ventures delivered over 600,000 home units in 249 cities across the country, the filing said.

Reuters revealed last week that sources said Country Garden had picked Kroll, a top financial risk and advisory firm, to carry out a liquidation analysis.

That news suggests the group has realised it may have slim chance of surviving Beijing’s dramatic deleveraging, given its huge debts and the dark cloud over the real estate sector.

Country Garden’s inability to meet a deadline of March 31 to post earnings means its stock is likely to be suspended from trading on Tuesday under Hong Kong stock exchange rules.

The Hong Kong market was closed on Friday for the long Easter weekend. It will reopen again on Tuesday.