Dec 07, 2016 04:55 PM

Executive Heading Wanda Property Relisting Departs

(Beijing) — The man hired to privatize Dalian Wanda Group's real estate unit from Hong Kong and relist it on the Chinese mainland has left the company — a setback to the plan that company founder Wang Jianlin guaranteed would be completed by September 2018.

Lu Xiaoma's departure comes three months after Dalian Wanda Commercial Properties Co. Ltd. completed its HK$34.5 billion ($4.45 billion) share buyback, paving the way to relocate the company's listing from Hong Kong to the mainland.

Wanda is one of dozens of Chinese companies listed outside the mainland that have privatized or announced plans to do so in the last two years with the aim of returning to their home market where they believe they can get higher valuations. But a huge waiting line for IPOs in China has forced many to seek "backdoor" listings by injecting their assets into an existing listed shell company.

Lu, who has strong ties to the China securities world through his former job as a deputy vice general manager of the Shenzhen Stock Exchange, completed the Hong Kong delisting in September. But the deal has hit a few snags since them.

An internal memo dated Nov. 30 said Lu has left the company, according to a source familiar with the situation. There was no additional information about the departure, or how it would affect the company's relisting plan.

Two weeks before Lu's unexpected departure, a potential shell-company relisting vehicle, Shenzhen-listed Beijing Soft Rock Investment Group, said it had been in discussions about a backdoor listing plan with Wanda but had been unable to reach an agreement. Wanda responded by saying it had only been in initial discussions with Soft Rock, and a company source said there were still many other potential shell-company partners.

Wanda's property arm announced plans to privatize in March, 15 months after going public in Hong Kong. At the time, Wanda's founder ,Wang Jianlin, one of China's richest men, said he was disappointed the stock had traded below the listed price for months and believed it was undervalued by international investors in Hong Kong.

In order to attract backers for the privatization, Wang guaranteed he would relist the company within two years, or by September 2018. When it first detailed its privatization plan, Dalian Wanda Group said that if it didn't meet that timetable, it would repay the de-listing's backers at a rate that guaranteed them the equivalent of a 10% to 12% annual return.

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