The ironic situation of the once richest man in Asia: Wang Jianlin

'Blink' lost 40 billion USD, 'gung' every second to save the real estate empire, sold off a series of properties to pay debts.

Last year, billionaire Wang Jianlin (68 years old) was still one of the few Chinese real estate tycoons to avoid the impact of the industry's terrible plunge.

The founder of Dalian Wanda Group was still confident of his financial ability and even supported another tycoon who was looking to sell a series of shopping malls for 700 million yuan ($98 million). Mr. Wang also plans to merge these malls into his commercial property management company in preparation for the IPO.

Now, however, the IPO is on hold, and Wang is working every second to "save" what remains of his 35-year-old shopping, entertainment and hotel empire, once hoped for. become Walt Disney China.

The billionaire has discussed with Chinese regulators and strategic investors about the possibility of supporting his group. Meanwhile, the company's other senior executives went around negotiating the extension of billions of dollars in debt from banks, trust companies and suppliers.

The billionaire is facing a serious crisis

In the midst of difficulties, Mr. Wang's fortune has decreased by 40 billion USD, now it is only 6.6 billion USD. Sources close to the company said the billionaire is asking executives weekly updates on refinancing efforts and performance tracking indicators compared to the previous month, along with a total suspension. new initiative.

Billionaire Wang Jianlin.

While Wanda has previously partnered with some of China's biggest banks, executives are still reaching out to smaller lenders to increase credit lines. The company still has about 40 billion yuan in cash, enough to cover short-term debts but still struggling to pay investors, if Zhuhai Wanda Commercial Management Group Co. cannot be listed this year.

The crisis facing Mr. Wang further underscores the problems engulfing China's real estate sector. With the expectation of soon reviving an industry that is facing so many difficulties, even financial "tycoons" like Wang are racing to ensure the trust of creditors and partners.

“Over the past 10 years, real estate companies have grown too fast and have too much debt,” said Louis Tee, managing director of brokerage Wealthy Securities. The heyday is over, especially for real estate billionaires.”

Once the richest man in Asia, billionaire Wang has always been wary of Beijing's tightening regulations.

Six years ago, state banks restricted loans to Wanda, forcing the company, HNA Group and Anbang Insurance to downsize its overseas expansion ambitions.

Wanda - once the world's largest movie theater operator, almost divested from the US cinema chain AMC Entertainment 2 years ago. This investment was valued at $2.6 billion when made in 2012.

Billionaire Wang quickly acted to "save" his group. About five years ago, Wanda avoided bankruptcy when Wang sold his hotel to Guangzhou R&F Properties Co., which sold tourism and theme park projects to Sunac China Holdings Ltd. and brought in about 69 billion yuan.

When Covid-19 broke out, Wang's fortune fell again. He has launched a campaign to sell assets to reduce debt, withdraw from overseas expansion ambitions and sell shares in the Legendary Entertainment studio.

The new fundraising round has been delayed

However, the troubles are not over yet. In March, the China Securities Regulatory Commission (CSRC) sent a letter to Wanda's mall operator, requesting a presentation on Zhuhai Wanda Commercial Management's delayed IPO. This subsidiary manages more than 400 shopping centers.

The main obstacle preventing this company from being able to IPO is investor indifference and caution on the part of Chinese regulators.

Regulators are concerned about Wanda's financial health, as the company faces about 30 billion yuan in refunds from pre-IPO investors if it doesn't list this year. In early May, Zhuhai Wanda's listing application on the Hong Kong Stock Exchange expired, making investors worried.

Faced with this situation, Wanda's bond prices plummeted. Bonds maturing in July of this year are currently trading at 86 cents. Zhuhai Wanda faces 6 billion yuan of domestic bonds that will mature or investors demand a refund by the end of November.

According to Bloomberg, Wanda is working to increase liquidity as it seeks to sell about 20 shopping malls and digital payment licenses. The company is also in talks with major Chinese banks about debt relief plans.

The end of June is an important time when state-owned banks assess lending risks and require reinvestment, sources close to the matter said. Wanda is in talks with banks including CBC about a plan to allow them to extend principal repayments on some domestic loans.

Under the plan, the giant seeks to refinance all of its domestic loans that are due this year without having to pay principal. In addition, Wang is also negotiating with major investors on his own, seeking to extend debt if the company does not list Zhuhai Wanda on time.

This month, a court in Shanghai froze the 1.98 billion yuan worth of shares held by Dalian Wanda in Zhuhai Wanda due to a financial dispute between the company and a partner in a Changchun project.

And things are becoming increasingly urgent for Wang. Meanwhile, his $98 million aid to his friend Wu Po Sum of Central China Real Estate has yet to be fully disbursed. Sources close to the company said that Wanda has just taken over less than 5 projects and the rest is still being appraised.

Refer to Bloomberg

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