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China's Wanda Sports files for US IPO partly to pay down loan
[NEW YORK] Wanda Sports Group Co, a unit under Chinese billionaire Wang Jianlin's conglomerate Dalian Wanda Group Co, filed to go public in the US with a goal of raising funds to pay down debt.
The Beijing-based company, which has had partnerships with FIFA and the Chinese Basketball Association, owns sports properties and generates revenue from events, sponsorship and media pacts. In its filing Friday with the US Securities and Exchange Commission, it listed the size of its IPO as US$500 million, likely a placeholder amount that's subject to change.
Wanda Sports had 2018 revenue of US$1.29 billion, up about 15 per cent from a year ago, the company said in the filing. Its profit for the year was US$62 million, a 31 per cent drop from the previous year. Dalian Wanda will continue to retain a majority of total voting power after the offering because of its dual-class share structure, according to the filing.
Wanda Sports is required under a covenant to use some of the IPO proceeds to repay an 11.5 per cent loan related to the group's restructuring, with the rest to fund investments and for general corporate use, it said in the filing. In 2015, Wanda acquired sports marketing firm Infront and World Endurance Holdings Inc, according to the filing.
In April, Dalian Wanda said it plans to invest 2 billion yuan (S$392.9 million) to build soccer fields and training centres in China. More than a year ago, amid part of a wave of asset disposals, Wanda agreed to sell its stake in the Spanish soccer club Atletico as the Chinese government curbed what it called "irrational investments" resulting in capital outflows. The group also scaled back its stake in cinema operator AMC Entertainment holdings Inc.
The offering is being led by Morgan Stanley, Deutsche Bank AG and Citigroup Inc. Wanda Sports is applying to list American depositary shares on the Nasdaq Global Market under the symbol WSG.