×
You will be redirected back to your article in seconds

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

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.

More Biz

  • David Rhodes CBS News

    CBS News Faces New Challenges in Weeks Ahead

    At CBS News, President David Rhodes has a series of important decisions to make that could affect the trajectories of some of TV’s best-known news programs. As its parent company seeks to move forward from recent seismic events – the ouster of its former CEO, Leslie Moonves; a corporate probe into its workplace culture; and [...]

  • Listen: Sarah Bernhardt and the Birth

    Listen: How Sarah Bernhardt and Eleonora Duse Helped Create Modern Celebrity Culture

    They were pioneers in the business of superstardom more than a century ago. Behind the scenes, legendary actors Sarah Bernhardt and Eleonora Duse were also entrepreneurs who ran their own companies and controlled every aspect of their careers. The new biography “Playing to the Gods: Sarah Bernhardt, Eleonora Duse and the Rivalry That Changed Acting [...]

  • Charter Communications logo

    Charter Reaches $174 Million Settlement on Internet-Throttling Fraud Suit

    Charter Communications agreed to a settlement valued at $174.2 million to resolve a lawsuit alleging the U.S.’s second-biggest cable operator defrauded broadband customers by failing to deliver promised internet speeds. According to the terms of the settlement with the New York Attorney General’s Office, Charter will pay $62.5 million in direct refunds to 700,000 active broadband [...]

  • Making a Murderer

    'Making A Murderer' Detective Sues Netflix for Defamation

    A retired sheriff’s detective sued Netflix for defamation on Monday, alleging that the hit series “Making a Murderer” falsely suggested that he planted evidence to frame a murder suspect. Andrew Colborn filed suit in Manitowoc County Circuit Court in Wisconsin, alleging that he had been subject to “worldwide ridicule, contempt and disdain” since the docuseries [...]

  • Yael Stone Geoffrey Rush

    'OITNB' Actress Yael Stone Accuses Geoffrey Rush of Sexual Harassment

    In a New York Times article published Sunday, “Orange Is the New Black” actress Yael Stone alleged that Geoffrey Rush harassed her numerous times while they both worked on a theater production in 2010. She said he exposed himself to her, sent her sexually suggestive text messages, and used a mirror to spy on her [...]

  • Laura Donnelly

    CAA Signs 'The Ferryman' Actress Laura Donnelly (EXCLUSIVE)

    CAA has inked Laura Donnelly for representation. Donnelly, who was most recently represented by ICM Partners, won the prestigious Laurence Olivier Award for best actress this year for her performance in Jez Butterworth’s play “The Ferryman,” directed by Oscar and Tony winner Sam Mendes. The production has also received two more Olivier Awards, including best [...]

More From Our Brands

Access exclusive content