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Sunac’s deal covers only Wanda tourism projects
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SUNAC Real Estate, an indirectly wholly-owned subsidiary of Sunac China Holdings Ltd, will pay 43.8 billion yuan (US$6.47 billion) for a 91-percent stake in 13 cultural and tourism projects from Dalian Wanda Commercial Properties while R&F Properties will buy 77 hotels from Wanda for 19.9 billion yuan, the three real estate developers said yesterday in Beijing.
This was an abrupt and significant change from the previous July 10 announcement made by Sunac and Wanda, which said the two parties had entered into a framework agreement that Sunac would pay 63.2 billion yuan for a 91 percent stake in the projects as well as 76 city hotels. It was believed to be the largest-ever real estate acquisition in the country if completed.
Under the earlier agreement, the 91-percent stake in the 13 cultural and tourism projects would cost Sunac 29.575 billion yuan while the 76 hotels would cost 33.595 billion yuan. Wanda had also agreed to procure a three-year 29.6 billion yuan loan to be advanced to Sunac through a designated bank at the bank’s three-year benchmark interest rate.
Sunac will pay using its own capital within 90 days of the agreement signing and R&F will complete its payment to Wanda by January 2018, according to a joint statement released yesterday.
The 13 cultural and tourism projects will retain the Wanda brand and Wanda will control the construction and operation of the 13 projects, the companies said.
The management contracts of the 77 hotels will also be unchanged after R&F’s acquisition, the companies said.
Sunac and R&F will also consider appointing Wanda Commercial Properties and Wanda Cinemas to operate commercial projects and cinemas developed in the future by Sunac and R&F, according to the statement.
The latest disposal of the hotel and cultural and tourism projects will enable Wanda Commercial Properties, the real estate arm of Wanda Group, to cut its debt under an asset-light strategy. The deal, meanwhile, will enable Sunac to expand its portfilo of owned properties and allow R&F to further cement its strength in the hotel business.
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