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Jan. 30 (NBD) -- Wanda Hotel Development Company Limited made an announcement on Monday that it will sell its two Australian projects to Australia's AWH Investment Group Pty Ltd for about A$315 million (245.5 million U.S. dollars) and the buyer will also repay the A$815 million (635.2 million U.S. dollars) in assumed debt on behalf of the company.

Gold Coast and Sydney projects to be disposed

According to the statement, Wanda Hotel Development will sell the entire issued share capital of its non-wholly owned subsidiary Wanda Australia Commercial Properties Pty Ltd., a unit holding 55 percent interest in Wanda Ridong (Gold Coast) Development Pty Limited and the entire interest in Wanda One Sydney Pty Ltd, which in turn owns the rights and interests of the Gold Coast Project and the Sydney Project respectively.

The company indicated that the disposal, which will result in a gain of approximate HK$556 million (71.1 million U.S. dollars), is in line with its deleveraging strategy, and the new sale will also strengthen Wanda Group's liquidity and improve its financial position.

Among all the new net proceeds, about HK$4.061 billion (519.5 million U.S. dollars) will be used to repay loans and interest due to Wanda HK connected with the financing of such Australia projects and another amount of approximately HK$43 million (5.5 million U.S. dollars) will be spent as general corporate working capital.

Wanda's Gold Coast Project is located in the heart of the Gold Coast city center - the Surfers Paradise and it is comprised of three high-rise tower buildings,of which one will be a five star hotel, and the other two luxury apartments are for sales. The project is expected to be completed in 2019 and will become a city landmark in the Gold Coast upon completion. 

The Sydney Project is located in Sydney’s Central Business District, a key commercial center and a prime area for development and is predicted to be finished in 2021.

The statement also disclosed that as of 31 December 2016, the net loss (after taxation) of Wanda's two Australian companies reached HK$58.079 million (7.4 million U.S. dollars), down from HK$ 216.012 million (27.6 million U.S. dollars) in 2015, and the rental income rose to HK$124.038 million (15.9 million U.S. dollars), compared with HK$98.331 million (12.6 million U.S. dollars) in 2015.

Wanda plans to clear out overseas property projects

The new deal is regarded as the second move of Wanda with an attempt to gradually discharge its overseas liabilities, following the sale of London luxury development project, One Nine Elms in early this month.

After a series of purchase several years ago, the Group has turned to sell its assets in recent 2 years.

Wang Jianlin, Chairman of the Dalian Wanda Group, revealed that the asset of the Group totaled 700 billion yuan (110.6 billion U.S. dollars) by cost method, decreasing 11.5 percent year on year. The domestic assets accounted for 93 percent of the total and overseas assets 7 percent.

Apart from repayment of the overseas debt, Wanda also expects to reduce the liabilities to an absolutely safe level within 2 to 3 years.

On November 17 of last year, the Group is reported to sell a package of 5 projects that located in the UK, Australia and the U.S. for 5 billion U.S. dollars. Now it has disposed 3 of the 5 projects, with Chicago's Wanda Vista Tower and Los Angeles' One Beverly Hills left.

It is noted that Wanda also intends to dispose its American projects, if they had the chance.

Email: zhanglingxiao@nbd.com.cn