Wanda "struggled": "implored" creditors to agree to the extension of the dollar bond

"In recent years, the company's decision-makers have not actually made obvious mistakes, and the influence of the external environment has been even greater. A financial institution investor commented.

Liu Wei/from Beijing

6 years seems to be a reincarnation, and the scale of the hand will reach the end of 2023, and for Wang Jianlin, chairman of Wanda Group, it will be a crossroads in his life.

"Creditors are kindly requested to agree to the extension plan. Because the US dollar bond can be successfully extended, it has a great impact on the decision of the domestic bank to renew the loan without principal repayment of Wanda Commercial Management. This is the attitude of Wanda Commercial Management when communicating with creditors.

On November 28, according to The Paper, Dalian Wanda Commercial Management Group Co., Ltd. (hereinafter referred to as "Wanda Commercial Management") recently communicated with holders that it hoped that bondholders could pass the extension plan of the US dollar bond due on January 29, 2024. According to Wanda Commercial Management's plan, it is proposed to extend the US dollar bond to December 29, 2024.

People close to Wanda Group said that this bond is the US dollar bond of Wanda Group's previous public development period of 600 million.

Since 2017, Wanda Group has had to start an asset sell-off mode due to the tight capital chain, but it has also been a blessing in disguise. Today, 6 years later, the same plot seems to have begun to play out on Wang Jianlin again, can Wang Jianlin still survive in a desperate situation?

"In recent years, the company's decision-makers have not actually made obvious mistakes, and the influence of the external environment has been even greater. A financial institution investor commented.

━━━━

"Eventful"

Wanda Commercial Management has previously publicly stated its plan to extend the US dollar bond, and said that due to the current downturn in the real estate industry and the rising interest rates in the overseas capital market, the company is facing certain difficulties in refinancing, and there is a certain uncertainty in the approval of Zhuhai Commercial Management, a subsidiary of Wanda Commercial Management, before the end of the year.

According to the data, the maturity date of the bond is January 29, 2024, the coupon rate is 7.25%, the investment grade is high-yield, the issue size is 600 million US dollars, the issue price is 99.036 US dollars, and the issue yield is 7.39%.

The interests of Wanda Commercial Management and creditors are colliding fiercely, but the unsolved problems surrounding the former do not stop there.

On November 27, it was reported that Zhuhai Wanda Commercial Management intends to postpone its listing in Hong Kong until 2026 at the longest, and is currently in discussions with investors.

Some investors did not accept this plan, believing that the time delay was too long, and according to the current environment, it is impossible to predict the future situation, which is too variable, and a private equity firm holding Wanda dollar bonds also expressed disagreement with the plan, because the delay is too long, and the cost of capital is also very high, and it may be considered if it is delayed until 2024.

The postponement of the listing of Zhuhai Wanda Commercial Management has increased the difficulty of testing for Wanda Commercial Management.

On November 15, it was reported in the capital market that the pre-IPO investors of Zhuhai Wanda Commercial Management, a subsidiary of Wanda Group, refused to postpone the payment of 30 billion yuan and the initial proposal for interest due at the end of the year.

According to the news, Zhuhai Wanda Commercial Management proposed to pre-IPO investors to repay 30 billion yuan in installments within four years, and at the same time provided more than 20% of Zhuhai Wanda's equity as collateral. Wanda is also considering other options to enhance liquidity, including a resale of a stake in its shopping mall division and an increase in a private credit facility, the sources said.

Now is Wang Jianlin's "eventful autumn" - the extension of US dollar bonds affects investor confidence, thereby dragging down the listing process of Zhuhai Wanda Commercial Management, and the resulting VAM agreement to repay 30 billion yuan of principal and interest has become another heavy burden for Wanda Commercial Management, which in turn worsens the liquidity of Wanda Commercial Management, which will undoubtedly increase the difficulty of the company's business.

━━━━

6 years of reincarnation

Back in 2017, in the face of Wanda's huge debt, Wang Jianlin decisively sold Wanda's hotel and cultural tourism business to Sunac and R&F. In this deal, Wang Jianlin lost tens of billions of yuan, but Wanda also kept its most important business assets. Wang Jianlin's resolute action is also regarded by the outside world as a broken arm to survive, and has avoided the subsequent downward crisis of the industry.

After Wanda Commercial Management recovered, Wang Jianlin also had the ability to "help others".

In 2022, Wang Jianlin successively acquired the assets of real estate companies, and was known as the "white knight" in the industry. He was not only discussed with Hu Baosen, chairman of Henan Jianye, Daniel Zhang, chairman of Xinyuan Group, but also Du Yinwu, chairman of Shanxi Tiansen Group, and projects involved in Beijing Blue Harbor and Wukesong Zhuozhan Shopping Center.

In 2015, Wang Jianlin became the richest man in the country, and in 2016, his wealth reached its peak, reaching 33 billion US dollars. In the 2022 Hurun Report, Wang Jianlin ranked 32nd with a wealth of 100 billion yuan, and is the richest man in the real estate industry. Wanda Group has also become the largest sponsor of the 2022 World Cup.

However, as the date of Zhuhai Wanda Commercial Management's listing of VAM approaches, its financial fundamentals are far from as glamorous as they appear on the surface.

As of the end of the first half of 2023, the balance of cash and cash equivalents of Zhuhai Wanda Commercial Management was 14.692 billion yuan, a year-on-year decrease of 53.44%, and the consolidated interest-bearing liabilities were 141.283 billion yuan, of which the interest-bearing liabilities due within one year were 29.257 billion yuan, and the cash on hand could no longer cover the short-term debt.

A person familiar with Wanda Group said in an interview, "After several twists and turns, Wang Jianlin's business strategy has not changed, but the market has become too fast." In 2017, Wanda Commercial Management resolved half of the 400 billion yuan debt through asset sales, and about 50 billion yuan of the remaining 200 billion yuan was solved by debt-to-equity swap. In the past six years, Wanda Commercial Management's total liabilities have not decreased significantly, and the corresponding assets have depreciated instead of appreciating. Coupled with the fact that the listing was not successful, there were no more assets to mortgage for financing, and the current situation was not difficult to predict. ”

Just like 6 years ago, Wang Jianlin transferred his assets again. This year, Wanda Commercial Management has successively put its Wanda Plaza, financial licenses, Infront Sports, and film company equity on the shelves. Since July, Wanda has transferred the equity of Wanda Film three times, with a total cash amount of about 6.762 billion yuan. In addition, Wanda has sold five Wanda Plazas.

The person said, "At present, Wanda is selling assets to repay debts, but the price is low and selling slowly." Now that good assets are sold, they can slow down for a while, but after the asset depreciation accelerates, the situation will be even more unfavorable. ”

Wanda Commercial Management recently released its financial data, saying that in 2023, Wanda Commercial Management will face a concentrated maturity of 15.4 billion yuan of domestic public bonds and 400 million US dollars of bonds, totaling about 18.2 billion yuan of public bonds, and all of them have been paid on time. Up to now, Wanda Commercial Management's domestic credit bond balance is 6.9 billion yuan.

As of the end of September this year, Wanda Commercial Management's net assets after deducting all liabilities exceeded more than 300 billion yuan, and a total of 492 plazas were opened, including 202 cooperatives. As the business management business continues to recover, it generates net operating cash flow every year.

Duty Editorial Board: Su Zhiyong

Editor in charge: Li Hongmei, Liu Ya

Review: Dai Shichao

China Real Estate News All Rights Reserved

It may not be reproduced or used in any form without authorization