Dalian Wanda to invest $11.6b to prop up Shenyang city

Source:Global Times Published: 2019/5/16 19:18:40

Dalian Wanda Group, a primarily real estate conglomerate founded by Chinese billionaire Wang Jianlin, has announced an 80-billion-yuan ($11.6 billion) investment plan, which an expert said shows the company has made headway in reducing its debts by getting smaller.

Dalian Wanda announced plans on Wednesday to invest the money in Shenyang, capital of Northeast China's Liaoning Province. It has already invested 25 billion yuan in the city. 

The company plans to build a world-class cultural plaza, which will contain facilities including a sports park, holiday hotel clusters and a cultural tourism city. Wanda also plans to build an international hospital, an international school and five Wanda commercial plazas, according to a statement on the company's website on Wednesday. 

According to the statement, Wanda has been investing in Shenyang for 18 years and had made a profit on each project there.

"Dalian Wanda has been taking some time to 'slim down' to cut its debt level. This high-profile investment announcement can be taken as a sign that Dalian Wanda has managed to get its debt down to a reasonable level, and now it wants to play up its investor image with the public again," Song Ding, a research fellow at the Shenzhen-based China Development Institute, told the Global Times on Thursday. 

In recent months, Dalian Wanda has been selling off domestic and overseas assets to pay off debt amassed during years of expansion, according to media reports.

Wang also disclosed in Dalian Wanda's 2018 work summary that Dalian Wanda's interest-bearing liabilities had dropped by about 30 percent in 2018 compared with 2017. He also said that Dalian Wanda had resolved almost all of its overseas debt.

In 2018, Dalian Wanda generated revenue of 214.3 billion yuan, down 5.7 percent year-on-year, Wang said. 

Song also said that after this round of adjustment, Dalian Wanda's new strategic layout has been emerging.

Last year, Dalian Wanda announced that its subsidiary Dalian Wanda Commercial Management Group Co would withdraw from real estate development and become a pure commercial management enterprise. 

"I think Dalian Wanda is still extending its industrial foundation, but it's shrinking its traditional real estate business and moving to more high-end, culture-related commercial real estate," Song said. 

He said that Wang has sought to "revive Dalian Wanda's historic brilliance" as the company recently announced plans to invest 2 billion yuan in building a juvenile football training base in Dalian, Liaoning.  

"Wang wants to show the market that his company will retain its dominant position in the market," Song said. 

"It's also possible that Wang wants to make a fresh start in a place where it's easiest, and Northeast China is like Dalian Wanda's hometown." 

Posted in: COMPANIES

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