Produced | Sohu Real Estate & Focus Finance
Author | Wang Zehong
Editing | Wu Ya
The decisive battle for IPO is imminent, but Wanda Commercial Management has encountered various storms, whether it is the freezing of equity or the hidden acquisition of several Wanda plazas, all of which are related to its debt pressure.
But public debt is a bottom line, especially for Wanda Commercial Management, which is in the final sprint of listing. On July 11, the capital markets reported that for the "20 Dalian Wanda MTN003" 1.575 billion yuan ticket due on July 10, Dalian Wanda Commercial Management has remitted the full amount of funds for redemption to the Shanghai Clearing Exchange.
In addition to the winning ticket due in July, Wanda Commercial Management has nearly 4.30 billion yuan of bonds, which will be repaid in January 2024. The news also pointed out that Wanda Commercial Management plans to repay the public debt through equity funds and refinancing channels.
In this regard, Wanda Group responded to Sohu Finance: "1.575 billion yuan ticket due payment news is true."
An industry professional told Sohu Finance: "Wanda has some liquidity pressure, but obviously this pressure comes from the expectation of listing and the real estate sector. The real estate sector and the business management sector are independent legal persons. As the main body of listing, there is no liquidity pressure in the short term, so it is natural to repay the debt on time. If there is an overdue, it shows that even the liquidity of the business management sector has deteriorated sharply, which will naturally endanger the listing process of the business management sector."
After the news of the scheduled payment came out, several US dollar bonds of Wanda rose on the same day. Among them, the purchase price of US dollar bonds due in 2024 rose by about 1.5 cents to around 61.7 cents per dollar, and Wanda’s domestic bonds "200,000 to 01" rose slightly by 0.6%.
Behind the equity thaw: Zhuhai business management became a mystery for 6 days, Vanke exceeded the freeze and unblocked
Meanwhile, another piece of good news also arrived.
On July 11, according to the information disclosed by the national enterprise credit information publicity system, all the shares held by Dalian Wanda Commercial Management in Zhuhai Wanda Commercial Management have been thawed, with a total amount of about 5.072 billion yuan.
The previous day, Qichacha showed that Dalian Wanda Commercial Management held all the shares of Zhuhai Wanda Commercial Management (holding 70.16%) were frozen, the amount of frozen shares was about 5.072 billion, the freezing period from July 4, 2023 to July 3, 2026, the enforcement court is Zhanjiang City Intermediate People’s Court of Guangdong Province.
But unlike in the past, the frozen equity was thawed in just 6 days, according to the national enterprise credit information publicity system, Zhuhai Wanda Commercial Management’s frozen 5.072 billion yuan equity has been lifted on July 10.
Such a large amount of freezing and thawing happened in the "lightning and flint", what happened behind the scenes? A relevant person from Wanda Group told Sohu Finance: "We don’t know the specific reason."
A number of Wanda Group companies have been frozen recently, including Dalian Wanda Group’s stakes in Dalian Wanda Commercial Management, Shanghai Wanda Microfinance, and Wanda Properties’ stakes in Wanda Properties.
In particular, Wanda and Vanke due to the Changchun Film and Television City project of more than 1 billion yuan of financial disputes, resulting in Dalian Wanda Group holding Dalian Wanda Commercial Management 1.979 billion equity were frozen, causing Wanda’s strong dissatisfaction, and said that the freeze Wanda Commercial Management 1.90 billion equity, significantly more than the amount of financial disputes between the two sides, is through legal channels to appeal, confident to safeguard the legitimate rights and interests of Wanda Group.
Compared with the "5.072 billion equity freezing incident", the ins and outs behind this financial dispute freezing incident are clear, but because of the excess freezing, Liu Jipeng, the legal adviser of the State-owned Assets Supervision and Administration Commission of the State Council and the dean of the Capital Finance Research Institute of China University of Political Science and Law, was bombarded, and recently recorded a video program to explain.
He believes that the Shanghai Hongkou Court 1.40 billion the disputed assets exceeded the standard by 94 times and seized Wanda 128.70 billion assets, accounting for almost one-third of Wanda’s entire net assets. Therefore, when the guarded person and the qualified intermediary provide strong evidence to prove that the value of the seized assets 120 billion, the legal department should unblock it in time and give Wanda Group sufficient relief rights.
Liu Jipeng also revealed that the Shanghai Hongkou court realized that the 94 times exceeding the standard required by Vanke was unreasonable and serious, and had given 830 million to the seized 1.98 billion equity, but the remaining 1.15 billion equity was still 53 times the disputed assets of 1.38 billion yuan, and the value 74.80 billion. As long as the equity is still in legal proceedings, Wanda Commercial Management listing and issuance of similar funds cannot be carried out.
Behind the 6-day lifting of the 5.072 billion yuan equity, whether it is also sealed due to financial disputes, it is still a fog.
"Borrowing new and returning old" suspension: reduce holdings of Wanda Film to cash out 736 million
But behind this series of events, all point to Wanda Group’s debt pressure. As of the end of June 2023, Wanda Commercial Management’s domestic open market bond stock size was 12.341 billion yuan, and the overseas bond stock size was about 1.80 billion US dollars.
In addition, according to the gambling terms of Zhuhai Wanda Commercial Management, if Zhuhai Wanda Commercial Management fails to go public by the end of 2023, Wanda Commercial Management is obliged to buy back 30 billion yuan of equity from investors.
According to the capital markets, Wanda Commercial Management plans to repay the public debt through equity funds and refinancing channels.
For open market debt, borrowing new to repay the old is one of the ways to solve the gap. However, Dalian Wanda Commercial Management applied to the Shanghai Stock Exchange to issue a 6 billion small public offering, which was suspended by the Securities Supervision Commission on June 28. It was Wanda Commercial Management that actively applied to the Securities Supervision Commission to suspend the issuance on June 9.
According to Sohu Finance, the funds used for the 6 billion bonds were originally planned to be used to repay four domestic bonds due in October 2024 2 billion yuan "200,000 up to 02", 2.50 billion yuan "200,000 up to 03", 1.50 billion yuan due in December 2024 "200,000 up to 04", and 3.80 billion yuan due in September 2025 "200,000 up to 01".
But now this plan has been temporarily unable to carry out, in early July, Wanda Group told investors that the Securities Supervision Commission suspended the registration process of 6 billion corporate bonds, mainly because Zhuhai Wanda Commercial Management’s application for listing in Hong Kong is still in the review process, and the bond application review will be resumed after the progress of the Hong Kong listing.
The core of solving the debt crux finally points to the listing. According to the previous agreement with the 1.30 billion US dollar syndicate to participate in the listing of the loan bank on November 30, Wanda has less than 5 months.
In addition, Wanda’s recent financing moves have been frequent. In early June, everyone’s life insurance loomed to take over Shanghai Songjiang Wanda Plaza, Xining Haihu Wanda Plaza, and Jiangmen Taishan Wanda Plaza. Recently, Wanda Investment has successively reduced its holdings of Wanda Film to cash in.
On the evening of July 10, Wanda Film announced that Wanda Investment reduced its holdings of 2245.74 million shares from June 12 to July 7, according to the estimated average price of 12.87 per share, cashing out about 289 million yuan; in addition, the 37.1877 million shares reduced from May 23 to June 13, cashing out 447 million yuan, a total of 2.5964% of the shares, a total of 736 million yuan.
In addition, Wanda Commercial Management’s performance is also a major support for cash flow. On July 3, Wanda Commercial Management released a business express, and 12 Wanda plazas were newly opened in the first half of 2023, with a total of 484 openings. The total rental income in the first half of the year was 26.32 billion yuan, an increase of 4.5% year-on-year; the net rent was 13.01 billion yuan, an increase of 7.2% year-on-year; the net rent of comparable Wanda plaza increased by 3.8% year-on-year. The rental rate was 98.2%, and the rent collection rate was 100%.