China's fourth-richest man seeks expansion with $6 billion IPO of Dalian Wanda property unit

Mon Dec 1, 2014 11:23pm EST
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By Matthew Miller and Clare Jim

BEIJING/HONG KONG (Reuters) - Wang Jianlin plans to raise as much as $6 billion from selling shares in Dalian Wanda Commercial Properties Co Ltd IPO-DWC.SS, to help fund the expansion of an empire built at speed using cheap government land.

China's fourth-richest man with a net worth of $13.2 billion, according to Forbes, has opened 100 Wanda Plaza mixed-use developments from 21 just four years ago. Wang is aided, he has said, by land bought at half the price others would have paid, from authorities betting on his ability to boost local economies.

Dalian Wanda Commercial Properties is now China's largest in the sector with 178 projects in 112 cities across 29 provinces, many anchored by malls and hotels alongside office and residential towers. On Monday, it won approval in Hong Kong to conduct the biggest initial public offering (IPO) in Asia Ex-Japan in four years.

But the approval comes at a time when an industry slump is pulling down earnings, and while eight so-called Wanda Cities - massive multi-projects - exacerbate its debt burden.

"Dalian Wanda has a lot of projects and they all need money," said a person familiar with the listing plan, who was not authorized to speak publicly on the matter so declined to be identified. "After the IPO, it can also issue bonds which will help lower funding costs."

Wang has tried to list Dalian Wanda Commercial Properties before. Regulatory reasons scuppered a Hong Kong IPO in 2005, and its application in Shanghai lapsed earlier this year with the bourse saying submitted documents were out of date.

Wang, a former member of the People's Liberation Army, now plans to take the developer into the world's 10 largest cities over the next decade, beginning last year with Los Angeles, Chicago, London, Madrid and Gold Coast.

"China's outbound investment is an inevitable trend," Wang told the APEC CEO Summit in November.   Continued...

A man shows the way for Wang Jianlin (R), Chairman of Wanda, during a meeting with Tencent Chief Executive Officer Pony Ma and Baidu Inc. Chairman and CEO Robin Li, in Shenzhen, Guangdong province, August 29, 2014. REUTERS/Alex Lee