Wanda Sells Insurance Holdings to Greentown China

Chinese conglomerate Dalian Wanda Group continued selling off its sprawling assets to pay debts amassed during years of overseas expansion.

In the latest move, property developer Greentown China announced late Monday a deal to buy 900 million shares of Aeon Life Insurance for 2.718 billion yuan ($390 million), accounting for 11.55% of the insurer’s stock.

While Greentown China didn’t disclose the seller, Aeon Life’s website listed Wanda Group as the only shareholder with an 11.55% stake, with all other shareholders owning less than 11.55%.

Dalian-based Aeon Life was Wanda’s most important insurance asset. After the sale, Wanda will no longer own a license for insurance business.

As of June 30, Aeon Life had net assets of 5.1 billion yuan. The company posted a net profit of 3.5 billion yuan last year, according to Greentown China.

Wanda accumulated its holdings in Aeon Life during 2014 and 2015 when the company was also aggressively snapping up assets domestically and globally, from Hollywood studios to New York luxury hotels.

After the government initiated a crackdown in mid-2017 on “excessive” overseas investment by some Chinese conglomerates and warned banks not to lend to the company, Wanda was stuck in a liquidity crisis. The company has since started to unload its assets.

Last year Wanda sold more than 60 billion yuan of China-based hotel and theme park assets to Sunac China Holdings Ltd. and R&F Properties. Wanda founder Wang Jianlin also said in January that the group would pay off all overseas debts.

As of September, Wanda Commercial Management Group, the major unit that runs Wanda’s real estate business, had paid off about 216 billion yuan of debt, or a third of the June 2017 level of borrowings, according to fiscal reports for Wanda Commercial Management obtained by Caixin.

While cash-strapped Wanda is exiting the insurance business, a number of Chinese developers have pushed into the sector by acquiring or launching insurance companies, include China Evergrande Group, China Vanke Co. and Tahoe Group, aiming to experiment with retirement homes for the country’s growing older population – already the largest in the world.

Greentown China and Aeon Life can create strategic synergy and complement each other’s business, Greentown China told Caixin. The two companies agreed to conduct strategic cooperation in insurance products, health management, retirement services and investment and financing, Greentown China said.