You may have heard of Wang Jianlin, chairman of the board of directors of Wanda Group and one of the richest people in China. He once said that his dream is to make Wanda's business centers all over the world, so that people around the world can feel the charm of Wanda. But, what you may not know is that he has recently been in a huge crisis, he may have to face a big bill of 38 billion, and he is also in danger of losing his business empire.
All because he signed a "bet" agreement with some investors, and if he can't get Wanda Commercial Management to go public by the end of this year, he will have to pay a heavy price. However, at the last moment, a big guy came to the rescue and let Wang Jianlin go, which made him temporarily relieved.
To talk about Wang Jianlin's "tight spell", we have to start from 2021. In order to realize his dream of globalization, Wang Jianlin decided to split the equity of Wanda Commercial Management and list it separately. Wanda Commercial Management is the core business of Wanda Group, which is mainly responsible for the management of Wanda Plazas across the country, and is the world's largest business management company.
Wang Jianlin hopes that through the listing, he can finance and expand, increase brand influence and enhance market competitiveness. However, the road to listing was not smooth, and Wanda Commercial Management encountered various difficulties and obstacles, including changes in the market environment, strict supervision, financial pressure, etc. In order to make Wanda Commercial Management go public, Wang Jianlin did not hesitate to sell a large amount of equity and introduced 22 institutional investors, including the Zheng Yutong family, Country Garden, CITIC Capital, Ant, Tencent and other well-known enterprises.
These investors invested a total of 38 billion yuan, the largest of which was PAG Investment Group, which invested 2.8 billion US dollars, accounting for 64% stake. Of course, these investors did not give money for nothing, they signed a "VAM" agreement with Wang Jianlin, stipulating two conditions: first, Wanda Commercial Management must achieve a certain net profit between 2021 and 2023, otherwise it will have to transfer shares or pay cash compensation;
Second, Wanda Commercial Management must be listed before the end of 2023, otherwise it will have to buy back investors' shares and pay a lot of interest. This agreement is like a "tight spell", firmly binding Wang Jianlin, so that he has to desperately promote the listing process of Wanda Commercial Management.
Although Wang Jianlin was facing tremendous pressure, he did not give up, but launched a series of "Jedi counterattacks". He increased the performance improvement of Wanda Commercial Management, so that Wanda Commercial Management exceeded the performance target for three consecutive years, after-tax income and profits have maintained stable growth, dividends have also increased, and the tax paid has also reached 10 billion yuan. Wanda Commercial Management currently manages 494 large-scale commercial centers in 227 cities across the country, and is the world's largest business management company with strong brand advantages and operational capabilities.
He adjusted Wanda Commercial's listing strategy from the original New York Stock Exchange to the Hong Kong Stock Exchange to adapt to market changes and regulatory requirements. He is also actively looking for new investors, including a number of overseas investment institutions such as Singapore and Hong Kong, as well as some potential cornerstone investors, which has added confidence and security to Wanda Commercial Management's listing.
In the end, he did not forget to maintain communication with the original investors, especially PAG, as the largest investor, whose attitude towards the postponement of the listing is very important to Wang Jianlin.
Just when the listing deadline of Wanda Commercial Management was approaching, Wang Jianlin finally waited for a "shocking" news. On December 12, PAG and Wanda Commercial Management Group jointly announced the signing of a new investment agreement. Under the new agreement, PAG will join other investors to reinvest in Zhuhai Wanda Commercial Management upon the expiration of its 2021 redemption period.
This means that PAG has abandoned the VAM agreement and will no longer require Wanda Commercial Management to go public at the end of this year, nor will it no longer require Wanda Commercial Management to repurchase shares or pay interest. This is undoubtedly a huge respite for Wang Jianlin, and he can put his heart back in his stomach. However, such concessions are not without a price.
Wanda Commercial Management's valuation will be raised from the original 38 billion yuan to 50 billion yuan, which also means that Wang Jianlin will sell more equity in exchange for the trust and support of investors.
In addition, the new agreement also stipulates that Wanda Commercial Management must be listed before the end of 2024, otherwise, investors have the right to require Wanda Commercial Management to buy back the shares and pay the corresponding interest. In other words, Wang Jianlin was only temporarily freed from the shackles of the VAM agreement, but he still had to face the pressure of going public, but the time was extended by one year.
The new agreement between Wang Jianlin and PAG is undoubtedly the result of a business game, with both sides having their own interests and considerations. In order to maintain the core position of Wanda Commercial Management, Wang Jianlin did not hesitate to give more equity in exchange for time and space for listing. In order to maintain its own investment returns, PAG did not hesitate to abandon the VAM agreement and extend the listing period.
Such a deal, which may seem like a balanced compromise, is actually a dangerous gamble. It is still unknown whether Wang Jianlin will be able to list Wanda Commercial Management by the end of 2024, and he will still have to face various uncertain factors, including market changes, regulatory risks, competitive challenges and so on.