Wanda Unit’s HK IPO application lapses for third time
DALIAN Wanda Group failed to meet a deadline to list shares of its management unit in Hong Kong for a third time, the latest setback for the Chinese conglomerate after its offshore bonds tumbled.
Zhuhai Wanda Commercial Management Group’s latest application for an initial public offering (IPO) lapsed on Tuesday (Apr 25), according to an update from the Hong Kong stock exchange.
Billionaire Wang Jianlin’s group has become the latest source of angst in China’s credit market amid uncertainty about the listing. Wanda may have to repurchase about 30 billion yuan (S$5.8 billion) of equity from pre-IPO investors if the deal does not happen by the end of 2023, according to a China Securities Regulatory Commission (CSRC) letter.
Wang acknowledged some difficulties at Wanda during an internal meeting last Friday, people familiar with the matter said. He told managers that the company can overcome its challenges, including the delayed IPO, said the sources, who requested anonymity discussing private matters.
Dalian Wanda did not immediately comment when reached Tuesday.
Wanda is still trying to get approval from the regulator. Last week, the CSRC, which requires Chinese firms listing offshore to register a planned IPO with it, marked Zhuhai Wanda’s application as “received”, said a list on the regulator’s website. It takes at least 20 working days for it to handle an application.
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Two US dollar bonds issued by a Wanda unit early this year now trade below 60 cents, according to Bloomberg-compiled prices – levels typically considered distressed.
Dalian Wanda had been viewed as one of China’s few high-quality names in the junk-bond market because it focuses on commercial real estate and asset-light property management businesses, rather than residences and development.
The company, one of the biggest mall operators in the country, has been paring leverage and selling assets. That followed a debt-fuelled buying spree that included US theatre chain AMC Entertainment Holdings.
Zhuhai Wanda initially planned to list the management arm in Hong Kong in the first half of 2022, but delayed the sale because of market volatility and challenging conditions in China’s real estate sector, Bloomberg News reported. The unit’s IPO could have raised about US$3 billion, Bloomberg reported earlier. BLOOMBERG
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