(Bloomberg) -- Dalian Wanda Group Co. has sweetened a proposal for pre-IPO investors in its mall operating unit to postpone a repayment for not listing shares in the entity this year, according to people familiar with the matter.

The Chinese conglomerate is offering to give new shares in Zhuhai Wanda Commercial Management Group Co. to the investors, the people said, in a step that could lead to billionaire Wang Jianlin potentially giving up control in the unit. 

The revised proposal comes after investors had turned down a preliminary one to postpone the repayment of 30 billion yuan ($4.2 billion) plus interest due in about three weeks. In the current offer, the new shares would be issued at a valuation of about 100 billion yuan, which is half of what the unit fetched in a 2021 funding round before a planned initial public offering, the people said.

As part of the current plan, Zhuhai Wanda’s biggest shareholder Wang could sell some of his shares in the unit and could involve a new investor, the people said. These moves would see Wang’s holding in Zhuhai Wanda to fall below 50%, meaning the tycoon would lose control over the mall operator, the people said, asking not to be identified as the information is private. 

Wang, through Dalian Wanda Commercial Management Group Co., controls more than 78% stake, according to the mall unit’s preliminary prospectus. Private equity firm PAG, which is the biggest investor in Zhuhai Wanda’s pre-IPO round, is leading the negotiation with Wanda on behalf of investors, the people said.

The latest proposal is more favorable for Zhuhai Wanda’s investors by giving them more oversight of the unit’s operations. The new shareholding structure could also make it easier to win regulatory approval for the IPO, the people added. 

Deliberations are ongoing and there’s no guarantee Wanda and the investors could reach an agreement, the people said. Representatives for PAG and Wanda didn’t respond to requests for comment.

Wanda was once seen as among the few high-quality Chinese issuers in the junk-bond market because it focuses on commercial real estate and asset-light property management business. The conglomerate’s financials came under pressure after borrowing costs surged and Beijing cracked down on the property sector.

Zhuhai Wanda managed 472 malls across China as of the end of 2022 and also had 181 projects in the pipeline, including 163 from independent third parties, according to its prospectus. The company filed its Hong Kong listing application for the fifth time in November.

Other than PAG, Zhuhai Wanda attracted a marquee list of pre-IPO investors including Ant Group Co., Citic Securities Co. and Tencent Holdings Ltd., its prospectus shows.

--With assistance from Emma Dong.

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