HONG KONG: Chinese conglomerate Dalian Wanda Group has raised nearly $6 billion for its commercial property management business ahead of its Hong Kong IPO, in one of China‘s biggest such fundraisings this year, four people with direct knowledge told Reuters.
Hong Kong-based private equity firm PAG led the fundraising, with $2.8 billion for the unit, Wanda Light Asset Commercial Management Co, said three of the sources.
PAG’s investment includes a $1.9 billion equity portion and $933 million from a syndicated loan facility, two of the sources said.
Other investors include developer Country Garden, private equity firm CITIC Capital and tech giants Tencent Holdings and billionaire Jack Ma’s Ant Group, the two sources said.
The fundraising underscores investors’ confidence in the Chinese commercial property market even as Beijing has unveiled measures over the past year to clamp down on irregularities and cool the debt-laden real estate sector.
Developer China Evergrande Group has become the highest-profile casualty of the crackdown.
Wanda Light Asset is valued at $28 billion in the pre-IPO fundraising, slightly below its target of 200 billion yuan ($31 billion), three sources said. The amount raised, however, doubled from its target of $3 billion.
PAG and CITIC Capital declined to comment. Wanda, owned by billionaire Wang Jianlin – once China’s richest person, and the other investors did not immediately respond to a request for comment.
The sources declined to be identified as the information is confidential.
The commercial property management business is considered separate and safe from China’s real estate crackdown, the sources said.
Twelve such companies have raised a total of $1.4 billion from Hong Kong IPOs in 2021, Refinitiv data showed.
Last year, Evergrande, Sunac China Holdings and Shimao Group Holdings all floated property management units.
Wanda was aiming to file for an IPO in September, Reuters reported in April, but one of the sources said the listing may not happen until early 2022, given the fundraising was agreed in the last couple of weeks.
The unit filed for an overseas IPO with the China Securities Regulatory Commission on Aug 20, the regulator’s website shows.
The unit, tasked with managing 368 Wanda Plazas plus 155 under construction, secured 3 billion yuan of investment from the government of the southern city of Zhuhai in March.