×
You will be redirected back to your article in seconds

Wanda Boss Clarifies Debt Position as Criticism of Deal-Making Grows in China

Dalian Wanda chairman Wang Jianlin moved Thursday to reassure markets of his mammoth company’s solvency amid a growing wave of discontent in China with financial excess and heightened scrutiny of Wanda’s dealings.

“Once the transaction with Sunac and R&F Properties is completed, Wanda Commercial will have nearly RMB 200 billion [$29 billion] in loans plus bonds,” Wang said, referring to Wanda’s surprise agreement to sell off its theme parks and dozens of its hotels. “We have decided to pay off most of our bank loans.

“With cash of RMB 100 billion on the books and RMB 68 billion to be received from this transaction, Wanda Commercial has approximately RMB 170 billion [$24.6 billion] in cash,” Wang said in a statement. “Wanda also has RMB 130 billion [$18.8 billion] of for-sale property inventory. By selling all of them, Wanda Commercial can recover tens of billions.”

Wang said that the deal with developers Sunac China and R&F Properties would result in “a significant reduction in our liabilities and extensive recovery of cash.” He said the sale showed that Wanda’s commercial and cultural tourism operations had moved into a new era of “asset-light” brand management – a change in company strategy Wanda announced two years ago.

“In today’s China, perhaps Wanda is the only enterprise that can achieve economies of scale and make a profit through managing commercial centers and cultural tourism brands,” Wang said.

Wang’s statement came amid a turbulent week for his company, following announcement of the theme-parks-and-hotels sale and reports that Chinese authorities have ordered banks to stop lending money to Wanda to finance several of its high-profile overseas acquisitions, including last year’s $3.5-billion purchase of Legendary Entertainment.

While Wang’s financial clarifications might help reassure investors in Wanda’s listed properties subsidiary, many questions hang over the real-estate-to-entertainment conglomerate. These include the sudden introduction Wednesday of Guangzhou-based R&F Properties as a party to the parks and hotels deal, and an abrupt change in price of the assets being sold. More fundamentally, there remain questions about Wanda’s previously excellent relations with the Chinese government.

From being a company seen to be doing Beijing’s bidding, such as bringing world soccer to China, Wanda now looks to be on shaky ground with authorities intent on punishing and shaming Wanda for its aggressive overseas deals, which appear to have breached the government’s recent capital controls.

Chinese media are now highlighting a recently broadcast China Central Television show in which a commentator said that some Chinese acquisitions of European soccer teams were akin to money laundering.

“They were not meant to invest money for profit but to move money abroad,” Yin Zhongli, a prominent researcher, said on CCTV on Tuesday.

Wanda owns 20% of Spain’s Atletico Madrid and last year became a leading sponsor of FIFA, the organization that runs world soccer. Another Chinese company, Rossoneri, which bought control of AC Milan from Silvio Berlusconi, is one of five companies, along with Wanda, that appear to have become a no-go for the Chinese banking sector.

Criticism of financial wheeler-dealing also grew over the weekend when Tencent co-founder Zeng Liqing described tech and entertainment conglomerate LeShi as a “Ponzi scheme.” LeShi is part of LeEco, which has also grown through aggressive deal-making and is currently wrestling with huge debts brought on by over-rapid expansion.

More Biz

  • Stan Lee, left, and Keya Morgan

    Stan Lee's Former Business Manager Arrested on Elder Abuse Charges

    Stan Lee’s former business manager, Keya Morgan, was arrested in Arizona Saturday morning on an outstanding warrant from the Los Angeles Police Department. The LAPD’s Mike Lopez confirmed that the arrest warrant was for the following charges: one count of false imprisonment – elder adult; three counts of grand theft from elder or dependent adult, [...]

  • promenade Cannes Croisette Cannes Placeholder

    Cannes Market Claims Record Visitor Numbers

    The Cannes Market, the Cannes Film Festival’s commercial wing, says that its 2019 edition welcomed a record number of participants. It reported 12,527 attendees. The largest group by nationality was from the U.S. with 2,264 participants, followed by France with 1,943 participants, and the U.K. 1,145. Comparable figures for 2018 were not available. The number [...]

  • Former movie producer Harvey Weinstein (L)

    Some Weinstein Accusers Balk at $30 Million Settlement

    Updated: Some of Harvey Weinstein’s accusers are balking at a proposed $30 million settlement of their harassment claims, which could scuttle the deal, Variety has learned. Attorneys in the Weinstein Co. bankruptcy case told Judge Mary Walrath on Thursday that they are close to a global resolution of the civil litigation. The accusers, their lawyers [...]

  • Director Dean DeBlois and online game

    'Dragon' Director Dean DeBlois and PUBG's CH Kim to Keynote 2019 VIEW Conference

    Dean DeBlois, director and executive producer of DreamWorks Animation’s “How to Train Your Dragon: The Hidden World,” and PUBG Corporation CEO CH Kim are the first keynote speakers announced for the 2019 VIEW Conference in Turin, Italy, in October. Since it began 12 years ago, VIEW, which stands for Virtual Interactive Emerging World, has continually [...]

  • Harvey Weinstein

    Harvey Weinstein Accusers Near Settlement in Bankruptcy Case

    Attorneys in the Weinstein Co. bankruptcy case say they are getting close to reaching a settlement that would compensate Harvey Weinstein’s sexual misconduct accusers. The company went bankrupt last year, as it faced hundreds of millions of dollars in debt and numerous civil suits on behalf of Weinstein’s alleged victims. The company sold to Lantern [...]

  • Ari Emanuel Endeavor

    Endeavor IPO Filing Offers Details of Company's Financials, Leadership Pay Packages

    Endeavor’s IPO filing Thursday offers a hard look at the company’s financial performance during the past three years during a period of rapid growth for the company that’s home to UFC, WME, Professional Bull Riders and a clutch of other assets. Endeavor is generating solid free cash flow from operations and healthy adjusted earnings for [...]

More From Our Brands

Access exclusive content