China's Wanda withdraws plan to buy London property

Chinese conglomerate Dalian Wanda said Tuesday it was abandoning plans to buy a 470 million pound ($606 million) plot of land in London, as Beijing presses companies to halt overseas acquisitions.

A spokesman for Wanda, controlled by one of China's richest men Wang Jianlin, confirmed its affiliate, International Real Estate Center, would no longer purchase the four-hectare (10-acre) Nine Elms Square site but did not give more details.

Britain's St. Modwen Properties said in June that it had reached a deal with its French partner, Vinci, and Wanda for the sale.

St. Modwen Properties issued a statement on Monday saying its joint venture with Vinci had "successfully completed" the sale, but the communique did not name the buyer.

Wanda, a massive group whose holdings range from commercial property to entertainment, sports and theme parks, is among a slew of companies under pressure from Beijing to put the brakes on debt-fuelled overseas investments.

The government laid out new rules on Friday to restrict foreign investments in sports clubs, real estate and entertainment. 

Beijing had encouraged such foreign ventures in previous years but the government now worries about growing debt loads that could endanger the economy.

In July Sunac China Holdings announced it would buy 76 hotels and a 91 percent stake in 13 other "cultural and tourism projects" from Dalian Wanda Group in a huge deal valued at 63.2 billion yuan ($9.3 billion).

But in joint statement a week later, the companies said another firm, R&F Properties, would instead buy 77 hotels for 19.9 billion yuan.

Sunac will now only buy a majority stake in the 13 cultural assets, and for a price of 43.8 billion yuan -- up from 29.58 billion yuan quoted last week. 

It was reported in July authorities plan to squeeze Wang's conglomerate by cutting off new loans and regulatory approvals for deals, in a punishment for breaching restrictions on overseas investments. 

The regulatory retaliation marks a major setback for the company that was among the most aggressive players in a flood of acquisitions around the world by Chinese companies.

Earlier this month the Hong Kong-listed arm of Wanda announced plans to buy more than $1 billion in assets from firms controlled by Wang as part of a massive shake-up at the conglomerate.

Source: AFP