(Bloomberg) -- Wanda Hotel Development Co., a unit of Chinese billionaire Wang Jianlin's business empire, has agreed to sell its 90% stake in a Chicago property project for $270 million to help cut debt, according to a filing. Shares surged in Hong Kong.
The subsidiary of Dalian Wanda Group Co., Wang's retail-to-entertainment conglomerate, will sell its holdings in the hotel-and-residential development known as Vista Tower to its Illinois-based partner, Magellan Parcel C/D LLC, Wanda told the Hong Kong stock exchange Thursday. Magellan owns the remaining 10% of the project.
The disposal is expected to result in a gain of about HK$94 million ($12.1 million) before taxes on paper, the company said.
Wanda Group, which once aspired to rival Walt Disney Co. in entertainment, has been offloading assets after a debt-fueled shopping binge between 2012 and 2016 when the group snapped up European football clubs, properties in Beverly Hills and Hollywood studios. The group's businesses such as cinemas and theme parks have been particularly challenged this year by the coronavirus pandemic. The Vista Tower disposal can help Wanda Hotel strengthen its financial position, the company said in the filing.
Wanda Hotel's stock jumped as much as 43% Thursday to 38 Hong Kong cents in resumed trading following a three-day suspension pending the announcement.
In March, Wanda Sports Group Co. agreed to sell its Ironman triathlon business for $730 million in cash. Wanda Group has also exited real estate projects in London and Australia, and disposed of stakes in flashier assets like Spanish soccer club Atletico Madrid. It has also reduced its holdings in AMC Entertainment Holdings Inc., the biggest cinema chain in the U.S.
Wanda acquired its stake in the Chicago project in 2014 and planned to invest $900 million in developing the site into a 101-story tower with about 393 apartments and a hotel. In 2017, the group said it was looking at options for its overseas properties, including Vista Tower.
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