Dalian Wanda Group, closely held by billionaire Wang Jianlin, is selling control of his theme parks after declaring a year ago that his attractions would outperform those of Walt Disney Co. in China.
Wanda said it would sell a 91% stake in most of its current and planned tourist attractions--including three major theme parks that are already open--and 72 of its 102 hotels in China for about $9.3 billion to property developer Sunac China Holdings Ltd.
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The move comes as Wanda tries to shore up its balance sheet ahead of a planned relisting of its commercial property arm in China, which is saddled with about $33 billion in debt.
Wanda, which was well-known as a property developer before moving aggressively into entertainment with movie theaters and theme parks, suffered a rare drop in revenue in 2016 because of a decline in residential property sales. The company has adopted a so-called "asset-light" model that would allow it to earn income from managing its properties instead of owning them.
On Monday, Wanda said it would still be responsible for managing and building theme parks that remain in development. These attractions will continue to operate under the Wanda brand, it said. The two companies are expected to sign a formal deal at the end of the month, it added.
In addition to three major theme parks in Nanchang, Hefei and Harbin, there are at least nine other planned theme parks and tourist attractions that are part of the deal.
A major shopping-mall developer, Wanda moved into theme parks as part of a broader shift into entertainment that began with acquisitions of Chinese cinemas in 2006. China's property market has been on a downtrend, leading Wanda to report a 14% drop in revenue last year.
In 2014, Mr. Wang made his theme park debut with his Wanda Movie Park in Wuhan, a city of nearly 11 million in central China. The park suffered from poor attendance and was closed for retooling last summer. Wanda hasn't said when it would reopen.
The closure came after Mr. Wang gave several nationally televised interviews last year promoting his new park in Nanchang. He scoffed at Shanghai Disneyland and its $5.5 billion price tag.
The Disney park drew more than 11 million visitors its first year. By comparison, Wanda's park in Nanchang reported attendance of more than 1.3 million in its first seven months.
Property developer Sunac has been a potential white knight for several struggling Chinese companies. The company, based in the Chinese port city of Tianjin, offered to pay $1.2 billion in 2015 to bail out property developer Kaisa Group Holdings Ltd., though that deal didn't go forward because certain conditions weren't fulfilled.
Earlier this year, it invested $2.2 billion in a unit of Chinese tech and entertainment company LeEco Holdings, which faced cash problems and difficulty raising fresh funds.
A Sunac representative declined to comment.
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(END) Dow Jones Newswires
July 10, 2017 01:05 ET (05:05 GMT)