IS WANG STILL CHINA’S RICHEST MAN? DALIAN WANDA CHIEF LASHES OUT AT DEBT ‘RUMOURS’, DENIES UNABLE TO REPAY 400 BILLION YUAN LOANS
Wang Jianlin, chairman of Chinese conglomerate Dalian Wanda, defended his company’s financial situation in a speech Wednesday amid worries about high debt levels.
The AMC Entertainment parent’s debt risk has reportedly come under government scrutiny in China’s effort to crack down on capital flight, which weakens the Chinese yuan at a time when the government is trying to stabilize it.
“Some people genuinely care about us, but others spread rumors and they hope for chaos,” Wang said in a Mandarin Chinese speech in Beijing on Wednesday. “Some people have said Wanda has a debt of 400 billion yuan ($59.2 billion) or loans of 400 billion yuan from the bank, but this is completely wrong.”
Wang was speaking at a signing ceremony for an altered deal to sell several of Wanda’s hotel and tourism properties.
Wanda will now sell 77 hotels to Guangzhou-based R&F Properties for 19.96 billion yuan and 91 percent equity share in 13 tourism projects to property developer Sunac China for 43.84 billion yuan, according to a statement. The total price of 63.7 billion yuan, or $9.3 billion, marks the second-largest deal ever in China’s real estate industry, according to Reuters.
Sunac was the sole buyer in a previous deal for Wanda’s hotels and theme parks announced last week that was also worth slightly more than 63 billion yuan.”The object and total amount of the transaction are basically the same,” the three firms said in a release Wednesday.
In contrast to the original deal, Wanda will no longer lend Sunac nearly half the funds to complete the deal, and the buyer will bear responsibility for existing loans of about 45.4 billion yuan, the release said.
Wang said Wednesday that as a result of the contract to sell hotels to R&F Properties, Wanda Commercial will have nearly 200 billion yuan in loans, plus bonds, with total cash of about 170 billion.
“Our cash flow will improve dramatically and we have decided to pay off most of the loans from banks,” Wang said.
As Beijing tries to slow Wanda’s overseas acquisitions, Chinese banks have been told to stop financing several of those deals, sources familiar with the matter said in a Reuters report Monday.
Beijing completed its once-in-five-years National Financial Work Conference this weekend and called for more stringent financial regulation, especially on high debt levels. On Monday, S&P Global Ratings put Dalian Wanda Commercial Properties — the unit selling the tourism properties to Sunac — and Wanda HK on negative watch as a result of the “unexpected asset sale.”
The Hong Kong-based S&P analysts were not immediately available for comment on the altered deal.
– http://www.cnbc.com/
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