Wanda’s AMC douses fears its expansion will stall because of domestic cash crunch

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Company reacts to rumours its ambitions of controlling one in every five of the world’s cinema screens by 2020 were in serious jeopardy

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AMC is attempting to cushion mounting investor fears it is suffering a cash shortfall after a string of recent takeovers, which have included the US$930 million buyout of Nordic Cinema Group this year, and the US$1.1 billion purchase of Carmike Cinemas, the fourth largest in the US, last year. Photo: Shutterstock

Celine Ge

Published: 6:16pm, 19 Jul 2017Updated: 10:20pm, 19 Jul 2017

AMC Entertainment, the US entertainment titan tasked with a worldwide cinema buying spree for its Chinese tycoon owner Wang Jianlin, has revealed his parent Dalian Wanda Group and mainland Chinese banks “have never been used as a source of funding” for its numerous acquisition deals.

The revelation came in a statement issued on Tuesday, as the company tried to cushion mounting investor fears it could suffer a cash shortfall after Beijing had put Wanda under scrutiny after a string of recent takeovers, which have included the US$930 million buyout of Nordic Cinema Group this year, and the US$1.1 billion purchase of Carmike Cinemas, the fourth largest in the US, last year.

“At no time was Wanda ever a source of funding for any of these acquisitions or individual theatre purchases....[and] AMC has never received committed financing from any bank headquartered in mainland China for any purpose, including for acquisitions,” AMC said in a press release, referring to the barrage of deals it has already completed, such as Nordic, Carmike and the US$1.2 billion takeover of Britain’s Odeon & UCI Cinemas last year.

The statement should help douse rumours that Wang’s ambitions of controlling one in every five of the world’s cinema screens by 2020 were in serious jeopardy.

On Monday, AMC’s shares plunged as much as 10 per cent in New York after South China Morning Post and other media outlets reported Beijing had ordered China’s largest lenders to suspend financing channels for six major Wanda purchases, after the company had crossed the government’s current red line on foreign investments.