Wanda Group, a Chinese commercial property developer, is facing hurdles with its planned IPO for its unit, Zhuhai Wanda Commercial Management Group, in Hong Kong due to new regulations requiring approval from both Hong Kong and Chinese securities regulators. Wanda's chairman, Wang Jianlin, has acknowledged the IPO's difficulties and aims to reduce the company's debt over the next two years. The IPO's uncertainty has caused Wanda's dollar bonds to drop, and the company is in talks with creditors to extend the deadline. The China Securities Regulatory Commission has also questioned Wanda's short-term repayment ability and given the company three months to address its concerns.
Chinese real estate company Dalian Wanda Group's dollar bonds experienced additional decline last week due to investor apprehension surrounding the potential listing of its unit in Hong Kong and the resulting impact on the group's financial stability. Wang Jianlin, the chairman of Wanda and formerly China's wealthiest individual, acknowledged the challenges faced by the unit's initial public offering (IPO) during an internal meeting. He pledged to reduce the company's debt over the next two years, as reported by a participant of the meeting and another individual familiar with the speech.
According to an anonymous source, Wang stated that Wanda Group would cease land acquisitions and suspend new property management endeavors. The individuals providing this information chose to remain unidentified as they lacked authorization to speak to the media. Wanda declined to provide any comment on the matter.
Reportedly, Wanda Properties Overseas' notes, which are set to mature in July 2023, experienced a decline in value, dropping from 92 cents on Friday to 90.472 cents on the dollar by the end of Monday, as reported by Duration Finance.
The value of Wanda Properties International Co's 2024 notes dropped to 70.571 cents, while the 2025 and 2026 notes issued by Wanda Properties Global earlier this year experienced declines, reaching 59.701 and 56.665 cents, respectively
Zhuhai Wanda Commercial Management Group Co Ltd, a subsidiary of China's leading commercial property developer, has submitted an application for an initial public offering (IPO) in Hong Kong. However, under newly implemented regulations introduced this year, the company also requires approval from the Chinese securities regulator. The timeline for receiving the necessary approvals remains uncertain.
Debtwire recently reported that Wanda had been in discussions with creditors regarding three offshore loans amounting to $1.3 billion. The discussions involved the possibility of creditors waiving their right to demand early repayment if the company's unit fails to complete the IPO by early May.
In late March, the China Securities Regulatory Commission raised concerns about Wanda's capacity to repay its short-term obligations. The commission referred to the IPO application documents of Zhuhai Wanda, which stated that if the company fails to complete the listing by the end of 2023, it would be required to repurchase shares worth 30 billion yuan ($4.35 billion) from its pre-IPO investors.
This story was first published in ET Realty
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