Advertisement
China property
BusinessChina Business

Wanda Group raises funds from Beijing Investment stake sale as US$400 million bond matures

  • China Ruyi Holdings agreed to buy a 49 per cent stake in Beijing Wanda Investment through its unit Shanghai Ruyi Television, according to an exchange filing on Sunday
  • A US$400 million bond of Wanda Commercial Management Group, an affiliate of Wanda Group, was due on Sunday

Reading Time:3 minutes
Why you can trust SCMP
1
Dalian Wanda Group, China’s top commercial property developer, is mired in debt. Photo: Reuters
Zhang Shidongin Shanghai

Dalian Wanda Group, China’s biggest commercial property developer, may avert a bond default after it agreed to sell a stake in a wholly owned subsidiary to raise 2.26 billion yuan (US$314.4 million), its third stake disposal in its units this month that underscores its liquidity stress amid mounting debt-servicing pressure.

Advertisement
Tencent Holdings-backed China Ruyi Holdings will buy a 49 per cent stake in Beijing Wanda Investment through its unit Shanghai Ruyi Television Production, according to a filing to the Hong Kong stock exchange on Sunday. The two sides signed the stake-transfer deal on Thursday, it said.

The proceeds from the stake sale in Beijing Wanda Investment will be used to service a US$400 million bond of affiliate Wanda Commercial Management Group that was due on Sunday, Reuters and Chinese media The Paper reported, citing unidentified sources.

The stake sale may ease the liquidity crunch facing Wanda Group after S&P Global and Fitch Ratings downgraded their ratings on Wanda Commercial Management this month, questioning its ability to repay the maturing debt. A liquidity crunch has been piling up in Chinese property developers as a rebound in home sales sputters and top policymakers refrain from significantly loosening the property market, with the focus shifting to pursuing high-quality growth.

After the stake transfer, Wanda Group will control 49.8 per cent of Beijing Wanda Investment while founder Wang Jianlin still owns 1.2 per cent.

10:57

Boom, bust and borrow: Has China’s housing market tanked?

Boom, bust and borrow: Has China’s housing market tanked?

It is the third time that billionaire Wang has offloaded assets within Wanda’s subsidiaries this month. Beijing Wanda Investment sold a combined 357 million shares, or a 16.4 per cent stake, in Shenzhen-listed Wanda Film Holding in two separate deals in July. It currently has a 20 per cent stake in the cinema operator.

Advertisement
Advertisement