Dalian Wanda Group Co. told investors that one of its key units suspended a bond-sale application after receiving guidance from a Chinese regulator, according to some of those investors.
(Bloomberg) — Dalian Wanda Group Co. told investors that one of its key units suspended a bond-sale application after receiving guidance from a Chinese regulator, according to some of those investors.
Dalian Wanda Commercial Management Group Co. filed to retract the request this month following regulatory guidance, said the investors, who asked not to be named as they’re not authorized to speak publicly.
It was suggested to the firm that it apply to halt the note-issuance application given a mall unit’s proposed initial public offering is being reviewed by the China Securities Regulatory Commission, according to the investors, and that the bond-sale request be resumed when there’s progress on the IPO.
The CSRC said Wednesday it received an application from Wanda Commercial to suspend the issuance proposal, and the regulator agreed to the request. The company filed with the Shanghai Stock Exchange last November to sell as much as 6 billion yuan ($828 million) of bonds, with proceeds to be used for debt repayment.
Wanda Group, the CSRC and the exchange didn’t immediately respond to requests for comment Thursday.
The development again puts the delayed listing of Zhuhai Wanda Commercial Management Group Co. in the spotlight. The company, whose fourth filing to go public was posted on the Hong Kong stock exchange’s website Wednesday, may have to repay pre-IPO investors about 30 billion yuan if a listing doesn’t occur this year. The first application was made in 2021.
The CSRC early this month sent a letter to Zhuhai Wanda about its overseas listing plan. The agency, which requires mainland companies to register a planned overseas listing with it, had asked Wanda Commercial in March about the IPO and how it might affect debt-repayment capabilities.
The halted bond application “is highly negative for bondholder sentiment and could act as a negative read for Zhuhai Wanda’s IPO prospects and lead to a vicious liquidity cycle,” according to Bloomberg Intelligence analysts Andrew Chan and Hui Yen Tay.
Wanda dollar notes were generally lower Thursday, according to prices compiled by Bloomberg, adding to declines late Wednesday. A bond maturing July 23 fell nearly 1 cent to 91 cents, further paring some of this week’s rebound.
–With assistance from Lorretta Chen.
(Adds details in the fourth paragraph.)
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