Wang Jianlin Sells Assets to Repay Debts, Wanda Commercial Management Honors $400 Million Bond
July 24, 2023 – Wang Jianlin, the founder of the Chinese conglomerate Dalian Wanda Group, has sold over 6.7 billion yuan ($1.04 billion) worth of assets in July to repay debts. The recent development comes as Wanda Commercial Management announced the successful repayment of $400 million bonds due on July 23.
According to insiders familiar with the matter, Wanda Commercial Management used funds from the transfer of 49% equity of its subsidiary, Wanda Investment, to redeem the US dollar debt. The transfer was made to Shanghai Ruyi for a price of 2.262 billion yuan.
The transfer of equity in Beijing Wanda Investment, which mainly deals with investment holdings and includes listed company Wanda Films, will result in Beijing Wanda Investment being held 49.8% by Beijing Wanda Cultural Industry Group, 49% by Shanghai Ruyi Film and Television, and 1.2% by Wang Jianlin. Shanghai Ruyi will indirectly hold 213 million shares of Wanda Film, accounting for 9.8% of the total share capital.
Despite the transfer, Wanda will still maintain its holdings in Beijing Wanda Investment and Wanda Films. Wanda Films clarified that the change in equity will not affect the company’s controlling shareholder and actual controller.
This is the third time in July that Wanda has transferred equity in its subsidiary companies. Earlier in July, Wanda Investment transferred shares of Wanda Film to Lu Lili and Shenxian Rongzhi, amounting to a total transfer amount of 4.504 billion yuan.
In addition to these transfers, Wanda has also sold several Wanda Plazas this year. This includes the sale of Shanghai Songjiang Wanda Plaza, Xining Haihu Wanda Plaza, and Jiangmen Taishan Wanda Plaza to Dajia Life Insurance for an anticipated transaction price between 1 billion and 1.5 billion yuan. Wanda Real Estate will also transfer its stake in Wuhan Huada No. 9 Innovation Investment Partnership to China Huarong Asset Management.
Despite these efforts to improve cash flow, experts warn that Wanda still faces significant repayment pressure. Standard & Poor’s has indicated that Wanda Commercial will face considerable repayment pressure in the next 12 months.
Wanda Commercial currently has 11 outstanding bonds totaling 10.766 billion yuan, with 1.348 billion yuan due within one year. Additionally, they have four outstanding US dollar bonds with a total size of 1.7 billion US dollars, of which two bonds worth 1 billion US dollars will mature within a year.
Industry insiders believe that the biggest risk for Wanda at present is whether they can go public. In recent years, Wanda has divested heavy real estate assets in order to establish Zhuhai Wanda Commercial Management, which is crucial for their IPO plans. Several rating agencies, including China Chengxin International, Fitch, Moody’s, and Standard & Poor’s, have adjusted their ratings for Dalian Wanda Commercial Management Group.
In response, Wanda Commercial Management Group has assured investors that its operating conditions are stable and profitability is good. The company remains committed to fulfilling its information disclosure obligations and advising investors to be aware of related risks.
As Wang Jianlin continues to sell assets to repay debts, the financial situation of the Wanda Group will remain under close scrutiny in the coming months.