China’s Wanda group drops bid for Bandar Malaysia project

Wang-Jianlin-bandar-malaysia-wanda-group-1KUALA LUMPUR: The Dalian Wanda Group, seen as the front runner to be the master developer of Bandar Malaysia in May, appears to be out of the picture completely.

A report in the South China Morning Post (SCMP) said the troubled Chinese property-to-entertainment giant had abandoned its bid to develop Bandar Malaysia, which SCMP described as the property portion of the Kuala Lumpur-Singapore high-speed rail project.

The report noted that the multibillion-dollar Bandar Malaysia property development project had received pitches from nine firms on how to develop the 197-hectare site, but that Wanda was not among them.

The report said Wanda declined to comment when contacted by the SCMP on Tuesday about the status of its bid for Bandar Malaysia.

Yesterday, Singapore’s The Straits Times named nine companies – two from Japan and the rest from China – as having pitched proposals for developing Bandar Malaysia at the former Sungai Besi air force base.

Wanda Group chairman Wang Jianlin had, in May, told the media in Beijing at a joint press conference with Prime Minister Najib Razak that the company’s possible investment in the project would be “really huge”, estimating it at more than US$10 billion (RM44 billion).

“While we have not reached an agreement yet, I am here expressing my stance,” he was reported to have said.

Najib, after meeting Wang, was reported to have praised Wanda’s ability to bring “something extraordinary” to Bandar Malaysia.

However, the Wall Street Journal later reported that China’s banking regulators told executives of the country’s state-owned lenders that six of Dalian Wanda’s foreign acquisitions were subject to government capital restrictions.

In addition, Beijing was preventing the company from using funds parked on the mainland to further finance any of these deals, according to the report.

The SCMP report quoted Wang as saying on Friday that he would shift his investment focus “mainly in China” after Chinese regulators had instructed the country’s largest lenders to cut funding for six of the company’s overseas acquisitions.

However, the Bandar Malaysia project was not among the six that lost funding support.

According to the SCMP report, mainland Chinese media reported on Tuesday that Wanda was quietly selling off its Wanda plazas – the 200 or so shopping malls that have become its main domestic assets after the group sold 13 theme parks and 77 hotels.

The Bandar Malaysia project, owned by 1Malaysia Development Berhad, had originally been awarded to China Railway Engineering Corp (CREC) and its Malaysian partner, Iskandar Waterfront Holdings (IWH), in December 2015 in a RM7.4 billion deal aimed at raising funds to tackle 1MDB’s massive debt burden.

However, on May 3, TRX City Sdn Bhd which comes under the finance ministry, announced that the share sale agreement with Beijing’s CREC and IWH regarding the sale of 60% of Bandar Malaysia’s issued and paid-up capital had lapsed and was, therefore, terminated.

It said this was due to the failure of the purchasing parties to fulfill payment obligations. But the joint venture had disputed the termination, and called it “unacceptable”.