(Yicai) Dec. 12 -- Dalian Wanda Group has negotiated a way forward with investors it brought in ahead of the planned initial public offering of its commercial property management unit, and they will not hold the indebted Chinese real estate giant liable for failing to meet the agreed compensation terms should the subsidiary not go public by the end of 2023.

Instead, private equity firm PAG and the other investors have agreed to re-invest in Zhuhai Wanda Commercial Management Group once the redemption period expires at the end of the year, according to the new agreement penned by PAG, which was the biggest investor at USD2.8 billion, Dalian Wanda said on its website today.

After the reinvestment, new and existing investors including Hong Kong-based PAG will own 60 percent of Zhuhai Wanda, while Dalian Wanda will hold the other 40 percent and remain the biggest single shareholder.

In 2021, some 22 investors, including internet behemoth Tencent Holdings, fintech firm Ant Group and developer Country Garden, paid CNY38 billion (USD5.3 billion) for a 21.2 percent stake in Zhuhai Wanda before it went public. A valuation adjustment mechanism was put in place that stated that Dalian Wanda would buy back the equity from these investors if the subsidiary did not float before the end of 2023.

Although Zhuhai Wanda applied to go public on the Hong Kong Stock Exchange four times since then, none of them materialized, and the last application is due to expire at the end of this month.

Zhuhai Wanda, which manages 494 business centers of which 290 are under the Wanda umbrella, is now in negotiations with investors to postpone its listing to 2026, according to a previous report by online news outlet The Paper.

Since these investors became shareholders, Zhuhai Wanda has out performed its performance goals for three consecutive years, Dalian Wanda said. Net profit is likely to surge 27 percent this year from the year before to CNY9.5 billion (USD1.3 billion), while revenue is predicted to climb 8 percent to CNY29.3 billion (USD4.1 billion).

Editor: Kim Taylor