China Blocks Banks From Lending to Wanda for Overseas Deals (Report)

China Blocks Banks From Lending to
Photo by Gerry Shih/AP/REX/Shutterstock

China’s financial regulators have blocked the country’s banks from making loans to Dalian Wanda to finance its foreign acquisitions, including entertainment assets such as Legendary Entertainment, it was reported Monday.

The Wall Street Journal said that banking sector regulators met with executives from large state-owned banks on June 20 and told them that six of Wanda’s foreign acquisitions were subject to capital controls imposed by the government last year.

Separately, it emerged Monday that Standard & Poor’s S&P Global Ratings had downgraded to BBB- its CreditWatch rating for Hong Kong-listed Wanda Commercial Properties, a Dalian Wanda subsidiary.

Sources close to Wanda declined to confirm or deny the existence of the lending ban. But they said that the Journal’s report appeared to be based largely on a single, unverified document circulating offline.

The Journal said it reviewed a document from one of the banks at the meeting. The document probably refers to Wanda’s foreign deals going back about five years, the newspaper said.

During that time, Wanda acquired Legendary, the AMC and Carmike theater chains, and other entertainment-related assets. Most of those deals have already closed, though new financing from China’s banks to service those agreements has apparently been halted.

While it is understood that the more recent acquisition of Odeon & UCI Cinemas Group has been closed and completed, the purchase of Nordic Cinema Group may not yet be finalized. Both of those European deals are being channeled through AMC in the U.S., which is ostensibly beyond the reach of Chinese regulators.

The regulators’ reported crackdown on lending to Wanda casts in a new light last week’s surprise announcement by Wanda that it was selling its theme parks and 70 of its hotels to property developer Sunac China for $9.3 billion. Wanda chairman Wang Jianlin told a Chinese financial journal that “the proceeds from the sale will be used to pay off loans. Wanda Commercial will pay off all bank loans by the end of this year.”

Wanda is not currently expected to make a statement on Monday’s report by the Wall Street Journal. On June 22 the company issued a statement in which it denied online reports that Chinese banks had been ordered to sell Wanda’s bonds and the shares of its listed subsidiaries. Those reports, which Wanda dismissed as “vicious speculation,” caused the shares of its Shenzhen-listed Wanda Film Holding to drop to the maximum of their permitted daily trading range.

Two days later, it emerged that the banking regulator had ordered a probe into bank lending to unlisted parent company Dalian Wanda. The statement has since been removed from Wanda’s corporate website.

In recent days, Wanda has also said that it plans to consolidate its Chinese film businesses within Wanda Film, the company previously known as Wanda Cinema Line. While details are expected to be announced on Aug. 3, it appears that the unlisted Wanda Pictures film production unit would be absorbed into Wanda Film and that loss-making Legendary, based in Los Angeles, would be omitted and remain as part of privately owned Dalian Wanda. Part of the entertainment sector restructuring would also involve the issue of new shares, the company indicated.

S&P explained its downgrade of Wanda Commercial Properties as being related to the theme park sale. “The risks that Wanda Commercial’s unexpected sale of its tourism projects and hotels could weaken its business position and have an uncertain impact on leverage” S&P said.

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  1. Studio Girl says:

    Wang Jialin is a very sweet & good & hardworking guy. Stop trying to make this story more than what it seems. Obviously investing in Hollywood in a manner where you don’t have majority control of a company is not a good idea at present as most of the studios/production-companies are currently mostly being run by idiots! It’s in China as a whole’s interest that the country have a bunch of world-class prosperous businesses – not bankrupt ones. But anyways, Wang is doing a good job. But the company just needs to rethink it’s biz strategy a little – which is what they clearly are doing.

    That said, you brainwashed people (like RB below) who are always rooting for China to fail because CNN told you it’s some sort of evil dictatorship, just use your brains & think for yourselves. All of this nonsense about China, a country just trying to be prosperous again (where the middle class is increasing by the day!), is being pushed out by some creeps who think that for us to be prosperous China has to fail. Which is no the case as every country can, and should, be prosperous together. But it’s the same reason these absurd agendas are constantly pushed out against Russia (a country that had mail-order-brides after the SU collapsed which is finally returning to normalcy!) & Iran (What in the world did that poor country do to anyone??) & Turkey (Erdogan, a democratically elected leader, is actually demonized for, through a democratic process, changing his country’s constitution from a military dictatorship one to one like France’s!), all while that creeeepy Saudi Arabian king & his creepy brother from Hades Netanyahu are treated as dear friends. But anyways, wake up & think for yourselves people! And if anyone from China is reading this, so much love from America & wishing only the very best for your country :) <3

  2. RB says:

    Well of COURSE theyre not expected to make a statement. I’m surprised they haven’t already been “disappeared” in order to “assist the government investigation.”

    “To get rich is glorious, but, uhh, not too rich!”

  3. sean kennedy says:

    Just the beginning!!

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