2024.04.02 11:47
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Wang Jianlin attracted a 60 billion yuan major investor

The big boss is gradually stepping back

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

After frequently "cutting meat" and selling assets last year, Wang Jianlin, the chairman of Wanda Group who was running around for debt crisis, finally received a large sum of "life-saving money".

Wall Street News learned on March 30th that Dalian Wanda Commercial Management Group signed an agreement with 5 investors including Taifeng Investment Group, CITIC Capital, Ares, Platinum Peony (a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA)), and Mubadala Investment Company on that morning. These 5 investment institutions will inject around 60 billion yuan into Dalian Xinda Alliance Commercial Management Co., Ltd. ("Xinda Alliance").

With representatives of investors such as Taifeng and Middle Eastern capital joining the board of Xinda Alliance, even the once powerful former richest man Wang Jianlin will now have to "work for" the Middle Eastern tycoons.

The 60 billion funding is the largest single amount in China's private equity market in nearly five years, and it is also a staggering amount in the current Chinese real estate circle. However, Wang Jianlin did not appear at the signing ceremony that is crucial to Wanda's "life or death".

In the new agreement, there are no more equity guarantees or clear listing timelines, completely cutting off the fuse that triggered Wanda's financial crisis last year. The cost, however, is that Wang Jianlin has relinquished absolute control of the core assets of the Wanda commercial empire.

Xinda Alliance is a company newly established in January this year to control Zhuhai Wanda Commercial Management, which is a commercial plaza operation and management platform and the main body of Wanda's light asset business that has been preparing for listing in Hong Kong for years.

The management team of Xinda Alliance will continue to use Wanda's personnel, with investors promising to maintain the stability of the management team. However, new investors will further intervene in corporate governance. Wang Jianlin needs to jointly control the future of Wanda Commercial Management, the largest commercial real estate operation platform in China, under the alias Xinda Alliance, with other investors.

According to the agreement, the aforementioned 5 investment companies will hold 60% of Xinda Alliance's shares, while Dalian Wanda Commercial Management will hold 40%. However, the specific investment proportions of the 5 investment companies have not been determined yet. Prior to this, Dalian Wanda Commercial Management directly and indirectly held shares in Zhuhai Wanda Commercial Management, exceeding 78% at one point.

Making Xinda Alliance more independent is a prerequisite for investors to continue investing. Huang Dewei, partner of Taifeng Investment and President of Taifeng China, revealed that Xinda Alliance will be more independent and operationally safer in the future.

Wanda also pointed out that after the signing of the investment agreement, it will further optimize the company's independent corporate governance, more effectively motivate the management team, improve operational capabilities and growth potential, fully leverage Xinda Alliance's industry-leading effect in the commercial plaza operation and management market, and ensure its long-term development.

Of course, shareholders' advantageous resources can also be further integrated with Xinda Alliance. Zhang Yichen, Chairman and CEO of CITIC Capital, believes that through this investment, Xinda Alliance will receive long-term stable support.

Investors have left Wang Jianlin enough dignity.

Their choice to continue standing with Wang Jianlin is based on the recognition that Wanda's assets are indeed of high quality, and they still have confidence in the future of the Chinese real estate industry. It is also because they see Wang Jianlin's absolute sincerity in ensuring Wanda's survival In terms of business, based on the current valuation of Xinda Alliance at 100 billion and Wanda Commercial Management's 8.8 billion dividend last year, Xinda Alliance's high dividend rate of 8.8% makes it an attractive investment target in the current market environment. If Xinda Alliance's valuation rebounds in the future, investors can achieve excess returns. Additionally, Xinda Alliance's strong capabilities in multi-city layout across the country and in light asset model output also demonstrate its risk control and scale expansion capabilities.

Wall Street News also understands that this luxury investment consortium's investment in Xinda Alliance is inseparable from the full support of the Dalian municipal government and active leadership from Taimee Investments. It is the support of investors and local governments that has enabled Wanda to gain the trust of investors including Middle Eastern capital.

Huang Lichong, President of Hui Sheng International Capital, pointed out that this investment is essentially a equity restructuring, helping Wanda Group to emerge from difficulties and avoid bankruptcy due to failed bets, while also isolating risks with Zhuhai Wanda Commercial Management.

In the past year, to cope with liquidity pressure, Wang Jianlin has relinquished control of Wanda Film Holdings and sold more than ten Wanda Plazas in succession. Faced with crisis, Wang Jianlin has once again shown his determination, which has made many investors willing to trust him again.

After selling off a large number of assets, Wang Jianlin, once China's richest man, has significantly reduced his commercial empire compared to its peak. His ambition to build the world's largest cultural group and challenge Disney's dream has gradually faded over the years.

As a representative of entrepreneurs in the golden age of real estate, Wang Jianlin's timely decision-making before the crisis has made Wanda a typical representative of Chinese corporate development, and he has also once topped the list of China's richest people. However, some of his past decisions have led Wanda through more than six years of hardship.

In the future, Wang Jianlin will no longer have a decisive say in the board of Xinda Alliance. In the future, Xinda Alliance may undergo more changes under the investment strategy of Taimee's founding partner Dan Weijian acquiring controlling rights through a buyout, and Wang Jianlin's Wanda business empire will also undergo significant changes.

For Wanda, a long-standing dominant real estate giant, with Wang Jianlin now in his 70s and his son Wang Sicong unwilling to take over and lacking professional capabilities, it may be a good thing to let new shareholders build a new management team and transition to a model of family shareholders + professional managers.

In recent years, once prominent real estate tycoons have fallen one after another, some have retired, some have been arrested, and some are struggling. The case of Wang Jianlin and Wanda has shown a way out for other real estate tycoons still struggling, such as Sun Hongbin and Guo Yingcheng: introducing new shareholders and gradually stepping back.

The cost, however, is that the business empires they have built will no longer be solely controlled by them. Their most core and high-quality assets will also need the support of new owners and capital to be preserved and leveraged. As assets are sold off and control of core assets is relinquished, these first-generation tycoons will gradually fade from the historical stage.

The roller-coaster-like experiences of these tycoons are poignant. However, capital never sleeps, and after the curtain falls on a generation of real estate tycoons, new figures will continue to write the legend of the real estate industry