Chinese Regulators Block Banks From Lending To Dalian Wanda For Overseas Acquisitions

China Blocks Banks From Financing Dalian Wanda's Foreign Acquisitions (Report)

China Blocks Banks From Financing Dalian Wanda's Foreign Acquisitions (Report)

The government has determined that six of Wanda's foreign investments, four of which have already closed, have violated capital controls that were enacted previous year, according to reports.

Run by China's richest man, Wang Jianlin, Wanda is one of a handful of Chinese conglomerates that have expanded aggressively overseas over the past few years, into areas well beyond their original business - in this case, property.

The government measures include a ban on banks from providing Wanda with financial support, Bloomberg News said, citing sources familiar with the government action.

Wanda, which owns a stake in soccer club Atletico Madrid, has over the past few years bought film producer Legendary, theater chains AMC Entertainment Holdings, Odeon & UCI Cinemas and Nordic Cinema Group, as well as a United Kingdom luxury yacht maker. Although the measures do not seem to apply to Wanda's real estate acquisitions, they are a major blow to Wanda's ambitions as the company joins a growing club of mainland investors that have drawn close scrutiny from the government.

Other Wanda deals included in the order were: USA exhibitor Carmike Cinemas, U.K. yacht maker Sunseeker International, Europe's largest movie theater chain Odeon & UCI Cinemas Group, and Stockholm-based Nordic Cinema Group. Britain's Odeon & UCI Cinemas Group Ltd., and Hollywood film producer Legendary Entertainment.

China's banking regulators met with executives of the country's big state-owned banks on June 20 and advised them that Dalian Wanda's foreign acquisitions were subject to the capital restrictions imposed by the government previous year, the journal reported, citing a document from one on the participating banks. As the pair of cinema chains are being acquired by Wanda's AMC subsidiary in the United States, they do not seem to fall under the jurisdiction of Chinese regulators.

Chinese banking regulators have ordered the nation's big banks to put the brakes on loans to property giant Dalian Wanda Group, the Wall Street Journal reported on Monday.

Banks have been told not to finance the deals or to allow Wanda to use its offshore assets as collateral for financing.

The regulatory crackdown helps explain Wanda's announcement last week that it will be selling 76 hotels, along with a 91 percent stake in its 13 theme park projects, to Tianjin-based developer Sunac in a mammoth transaction of RMB 63.18 billion ($9.3 billion).

In its most recent annual report at the end of 2015, Dalian Wanda Commercial Properties reported total debt of RMB 222 billion.