Penance payments

5 December 2017 By Christopher Beddor Follow @cbeddor

The indebted Chinese conglomerate is shuffling assets around, including a $470 million cash injection from its founder, as officials pressure firms to deleverage. The cash will help pay down $1.7 bln in offshore loans, but it will take more to escape the government penalty box.

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Hong Kong-listed Wanda Hotel Development Company said on Dec. 4 that Wanda Commercial Properties Overseas had signed a non-legally binding letter of intent to transfer its 65 percent stake in the firm to Wanda Investment Holding, which is wholly owned by Wang Jianlin, founder of parent company Dalian Wanda.

More than 3 billion shares will be transferred at HK$1.20 each, about 16 percent below than the closing price on Dec. 1. The deal is worth HK$3.7 billion ($470 million).

Wanda Overseas is a wholly owned subsidiary of Wanda Commercial Properties (HK), which is in turn the 100 percent-owned offshore funding and investment platform of Dalian Wanda Commercial Properties.

Dalian Wanda Commercial Properties proposed to repay four offshore loans totaling $1.7 billion worth in three installments ending in May of next year, Reuters reported. The firm started negotiations with its creditors after a ratings downgrade by S&P and Moody’s in September. Lenders on two of the four outstanding offshore loans then demanded immediate repayment.
- On Nov. 29, Chinese news website The Paper reported that Dalian Wanda Group sold Changbaishan International Resort, one of the country’s biggest ski areas, to another conglomerate in June. Wanda had previously described the ski resort as a 20 billion yuan ($3 billion) project.

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