Hornbill Unleashed

July 20, 2017

Cinema chain, Hollywood studio ‘insulated’ from China curbs on parent Wanda

Filed under: Politics — Hornbill Unleashed @ 8:01 AM

Image result for Dalian Wanda GroupCinema chain AMC Entertainment Holdings Inc and Hollywood studio Legendary Entertainment said their businesses were insulated from curbs imposed by Chinese regulators on overseas spending by parent firm Dalian Wanda Group.

Chinese banks have been told to stop providing funding for several of Wanda’s overseas acquisitions as Beijing looks to curb the conglomerate’s offshore buying spree, sources familiar with the matter said on Monday.

The move comes amid the introduction of broader restrictions on Chinese conglomerates moving funds abroad. Wanda, controlled by one of China’s richest men, Wang Jianlin, is one of the several highly acquisitive Chinese companies that have expanded aggressively overseas into areas beyond their original business.

AMC said, however, that four deals for cinema chains completed between 2015 and earlier this year were fully paid for by the firm’s own funds and loans from US-based banks.

“At no time was Wanda ever a source of funding for any of these acquisitions or individual theatre purchases,” AMC said in a statement yesterday.

The world’s biggest cinema chain added it had “never received committed financing from any bank headquartered in mainland China for any purpose” and that Wanda does not actively participate in the day-to-day running of AMC beyond three seats on its board.

Shares in AMC, which were bought by Wanda for US$2.6 billion in
2012, ended two percent higher yesterday after the statement. They had plunged 10 percent on Monday on news of curbs on Wanda.

Legendary, which Wanda bought in January last year for around US$3.5 billion, said in an e-mailed statement that it was “well capitalised with liquidity to fund its film and TV slates and operate its business as usual”.

Beijing is on a major drive to control risks in its financial system, including firms taking on excessive levels of debt to fund overseas deals. Chinese authorities clamped down on capital outflows and overseas acquisitions last year.

The curbs on Wanda, announced at a meeting in June, focus on six overseas deals where lenders have been told not to provide finance or to allow Wanda to use its offshore assets as collateral for financing, an internal bank document seen by Reuters showed.

Wanda, a major property developer, has been reining in some of its more ambitious undertakings.

It said this month it would sell tourism projects and hotels to Sunac China for US$9.3 billion as it looks to roll back plans for theme parks and reduce its debt pile.

It also scrapped a US$1 billion deal to buy Hollywood production company Dick Clark Productions Inc in March this year.


Source : Malaysiakini by Reuters,   Adam Jourdan


 

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