Wanda's asset shuffle buys brief Beijing reprieve

Wanda Hotel Development

06/12/2017 02:35

(The author is a Reuters Breakingviews columnist.  The opinions 
expressed are his own.) 
    By Christopher Beddor 
    WASHINGTON, Dec 5 (Reuters Breakingviews) - 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. 
          
    Full view will be published shortly. 
    On Twitter https://twitter.com/cbeddor 
     
    CONTEXT NEWS 
    - 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. 
    -  For previous columns by the author, Reuters customers can 
click on  BEDDOR/  
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Wanda Hotel Development announcement    http://www.hkexnews.hk/listedco/listconews/SEHK/2017/1204/LTN20171204451.pdf 
Dalian Wanda sold major China ski resort in June - report    
 urn:newsml:reuters.com:*:nL3N1O51IF 
Wanda founder Wang to buy majority stake in Wanda Hotel in $470 
mln deal     urn:newsml:reuters.com:*:nL3N1O42BG 
Wanda makes partial repayment on offshore loans     urn:newsml:reuters.com:*:nRLP66855a 
BREAKINGVIEWS-Communist Party assault muddles Chinese capitalism 
    urn:newsml:reuters.com:*:nL4N1MN16K 
BREAKINGVIEWS- Wanda's new overhaul is a prelude to relisting    
 urn:newsml:reuters.com:*:nL4N1KW197 
BREAKINGVIEWS- Wanda and Sunac go back to M&A 101    
 urn:newsml:reuters.com:*:nL3N1KB1BK 
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 (Editing by Pete Sweeney and Katrina Hamlin) 
 ((christopher.beddor@thomsonreuters.com; Reuters Messaging: 
christopher.beddor.thomsonreuters.com@reuters.net)) 
 
Keywords: WANDA M&A/BREAKINGVIEWS