Wanda unit’s HK shares slide after media report on penalties
Share prices of Wanda Hotel Development Co, a Hong Kong- listed arm of Dalian Wanda Group Co, fell 7.25 percent to HK$ 0.64 ( 8 cents) on Monday after a media report said that China’s banking regulator is “penalizing the company for breaching the nation’s restrictions on overseas investments.”
The Chinese government plans to penalize Dalian Wanda Group Co by cutting off funding and denying the conglomerate necessary regulatory approvals for certain transactions, Bloomberg News reported Monday, citing sources familiar with the matter.
Group chairman and billionaire Wang Jianlin was formerly China’s richest man.
Authorities found violations of government restrictions involving six investment deals made by Wanda, the sources were quoted as saying in the Bloomberg report.
Four of these deals have been completed while the other two are still pending, Bloomberg reported.
The deals being scrutinized include a Wanda subsidiary’s purchase of Nordic Cinema Group Holding AB and Carmike Cinemas Inc, the Bloomberg report said.
Neither Wanda nor the China Banking Regulatory Commission gave an immediate response to requests for comment from the Global Times.
Some of the penalties include barring these assets from being injected into any listed entity in China and refusing government approval if Wanda attempts to sell the assets to any Chinese companies, the report said.
Trading remains suspended for Wanda Film Holding Co, another Wanda subsidiary listed in Shenzhen.
Moody’s said on Monday that if the Wanda- Sunac deal is completed, the proposed transaction would be creditpositive for Dalian Wanda Commercial Properties Co because it would enhance the company’s liquidity and reduce its debt, thereby reducing the uncertainty associated with the company’s shift to focus on property investment versus property development.
In a surprise move, Wanda announced on July 10 that it would sell 13 tourism projects as well as 76 hotels to Tianjin- based property company Sunac China Holding in a deal worth 63.17 billion yuan ($ 9.3 billion).
But the company also sparked widespread controversy when it was revealed last week among Chinese media outlets that Wanda would off er a sizable loan to Sunac China Holdings to fi nance the acquisition.