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Tuesday , 21 November 2017
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Wanda Group’s abrupt reworking of a $9 billion property sale


Dalian Wanda Group’s abrupt reworking of a $9 billion property sale was messy until minutes before a high-profile announcement, as all sides scrambled to simplify payment – underscoring Beijing’s concerns over creative lending and ambitious deals.

Dalian Wanda had said it was selling 13 tourism projects – including three theme parks – and 77 hotels to developer Sunac for $9.3bn (£7.1bn).

But now the deal is being split, with another firm, Guangzhou R&F Properties, taking on the hotels.

One analyst described the restructuring of the deal as “very unusual” and “kind of crazy”.

It got what it wanted – although talks were so frenetic ahead of Wednesday’s news conference that it was touch-and-go about whether a deal would be done, said one of the sources who had direct knowledge of the deliberations.

Disagreements were such that the R&F name was temporarily taken off a board at the venue for the news conference which was also delayed by an hour, said the source, who declined to be identified due to the sensitivity of the matter.

The restructuring of the deal was “kind of crazy” said Ben Cavender, senior analyst with China Market Research.

“It is very concerning, and it’s very unusual at this late stage to have a $9bn deal, and then to have another deal with another company in place.”

He added Chinese firms were running into trouble because they did not have the due diligence or vetting in place for large mergers and acquisitions.

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