According to the Australian Financial Review newspaper, investment bank Credit Suisse has been appointed by Wanda to find bidders for Hoyts. The bank’s task force, it says, is led by co-head of investment banking James Disney who has already informally been scouting for buyers.
Wanda Film is listed on the Shenzhen Stock Exchange but has made no filing to the market or regulators. Contacted by Variety, a Wanda spokesman said that “all of China is on holiday this week until May 6. No statement has been made.”
Wanda Film bought the company for an estimated A$1 billion ($780 million at present day exchange rates) in 2015 at a time when its privately-controlled parent company Dalian Wanda had ambitions to become the largest film company in the world, having acquired North American cinema chain AMC in 2012.
Wanda’s expansion continued with the purchase of other assets including Legendary Entertainment and an iconic property in Beverly Hills which it expected to become the headquarters of its entertainment division. But by 2017 Dalian Wanda was reined in by Chinese authorities who queried the overseas buying spree and who ordered Wanda to slash its borrowings.
In March this year, it emerged that Wanda Film had cut its majority shareholding in AMC to just 9.8%.
Hoyts operates some 450 screens across Australia. It also owns Val Morgan, the leading agency for in-cinema advertising. Its business was badly hit the series of COVID-related lockdowns in the country last year. But cinema-going in Australia has bounced back strongly in 2021.
The Australian Financial Review also reports that Hoyts has some A$400 million of debt coming due in January 2022, and that it has appointed another investment bank Gresham’s to refinance that before its expiry.
According to an unaudited projection of 2020 figures, Wanda Film expected to report net losses in the range of $945 million to $1.07 billion (RMB6.15 to RMB6.95 billion), and revenues down about 60% year-on-year. On Feb. 1, Wanda Film received a letter of concern from the Shenzhen Stock Exchange requesting that it clarify the accuracy of the amount of goodwill impairment it reported for 2020.