(Yicai Global) Jan. 31 -- Dalian Wanda Commercial Properties Co. Chief Executive Wang Jianlin and backers signed a valuation adjustment mechanism, under which they will invest CNY34 billion (USD5.4 billion) and the firm will list by Oct. 31, 2023, which is more than five years later than the company had planned, state-backed online media outlet The Paper reported yesterday.
Tencent Holdings Ltd., JD.Com Inc., Sunac China Holdings Ltd. and Suning Commerce Group Co. are acquiring shares from investors who held stakes in the firm when it delisted from the Hong Kong Stock Exchange in 2016.
Wanda Commercial Properties agreed to not change its core business and must post a net profit from rent of CNY19 billion next year, or the companies have the right to require the company to compensate them in cash.
Wanda Commercial Properties and its backers previously agreed that the company would privatize before Aug. 31, 2018 or two years after it delisted, whichever came first. If it failed to list on the main board of a market in mainland China before then, Wanda Group would repurchase all shares, paying international and domestic investors 12 percent and 10 percent interest, respectively.
Its new deal did not designate a listing location.
Sunac, JD.Com and Suning will each appoint one delegate to Wanda Commercial Properties' board of directors without the right to vote. Whether Tencent, the leading backer, will secure a slot with voting rights is unclear.
The Dalian Wanda Group Co. unit's revenue fell 21 percent annually to CNY112.5 billion last year, and its rental income rose 30 percent to CNY25.5 billion, per the parent's annual report. Those figures represent 104 percent and 101 percent of the company's respective targets for the year.
Wanda Group is the largest shareholder of Wanda Commercial Properties with a 44 percent stake. Investors who held shares in the firm when it delisted hold 14 percent. Wang has a stake of 6.2 percent and other shareholders have 35.8 percent. The firm's net assets were worth CNY229.92 billion as of June 30 last year.