“Legendary is well capitalized with liquidity to fund its film and TV slates and operate its business as usual. Furthermore, Legendary has not been presented with any Chinese bank documents referenced by the recent press reports surrounding its parent, Wanda, and has not experienced any change in its relationship with Wanda,” Legendary said in a statement emailed to media.
Earlier this week, documents were circulated in China that appeared to show notes from a meeting in which Chinese financial regulators ordered banks to cut off funding to six overseas units of Wanda. The understanding was that these companies had been acquired in breach of capital control rules that China imposed late last year.
While the document acknowledged that most of the deals had been completed in 2016, it appeared to show instructions to the Chinese banks to shut off credit at the units and refuse to accept their assets as collateral, or to allow these assets to be included in any company listed on a Chinese stock market.
Legendary was acquired by unlisted Dalian Wanda in a deal announced in January 2016 for a sum of up to $3.5 billion. A subsequent attempt by Wanda to refinance the deal by including Legendary within listed Wanda Film Holdings (then called Wanda Cinema Line) was blocked in May last year. And a recently proposed restructuring of Wanda Film appears to concern only its businesses in China and to omit Legendary.
Earlier Tuesday, AMC Entertainment issued a far more detailed statement about its relationship with Wanda. That showed only minimal financial connections between the two groups. AMC also denied parts of the Chinese document and said that all four of its recent acquisitions had been fully financed and completed.
Legendary has enjoyed box office success in excess of $100 million in China with each of “Warcraft,” The Great Wall,” and “Kong Skull Island.” But the performance of these titles in other territories was disappointing.
The company is currently being operated jointly by Mary Parent and senior Wanda executive Jack Gao, pending the announcement of a new company president. Legendary’s founder Thomas Tull stepped down earlier this year.