The Chinese conglomerate Dalian Wanda Group, which has made headlines for its global acquisition spree, has said it will sell 76 hotels and a major chunk of 13 tourism projects to the property developer Sunac China for $9.3 billion.
The Chinese group, with businesses spanning real estate, films, sports and entertainment, had plans to build at least 20 such cultural projects around China.
The sale - the second-biggest real estate deal ever in China according to Reuters data -comes less than a month after China's Banking Regulatory Commission ordered a thorough review of the billions of dollars in loans that the country's state-owned banks had extended to Wanda and three other high-profile Chinese business groups that have spent heavily on foreign acquisitions in recent years.
Sunac will buy 76 hotels from Wanda and purchase a 92 percent stake of 13 cultural and tourism projects. "Wanda Commercial plans to pay back the majority of bank loans within this year", he was quoted saying.
Beijing began previous year to roll out restrictions to curb overseas capital flight, which analysts said raises funding costs to companies like Wanda as lending to them is now viewed as more risky due to the constraints they face.
Wanda Properties International Co's (萬達商業地產有限公司) bonds also rose.
"Selling assets, which is the last resort for big firms like Wanda, means that Wanda is running out of options to raise fund through normal financing channels", said Ivan Han, Shanghai-based senior analyst with financial information provider Morning Whistle. Shares in Wanda Hotel Development surged more than 150 percent after the news. Sunac halted trading of its shares in Hong Kong on Monday, pending the announcement, after closing 6.9 percent lower on Friday. "It's unclear if the sale of their tourism projects is good for them, especially since those tourism culture projects are Wanda's flagship ones".