China blocks banks from lending to Dalian Wanda entertainment company

According to reports six high-profile acquisitions made by Wang Jianlin’s Wanda Group in recent years are now being scrutinised by regulators

China blocks banks from lending to Dalian Wanda entertainment company

Wanda is among conglomerates including Fosun International Ltd (復星國際), HNA Group Co (海航集團) and Anbang Insurance Group Co (安邦保險集團) whose loans are under government scrutiny after the nation's banking regulator asked some lenders to provide information on overseas loans to the companies, people familiar with the matter said last month.

Four of those deals already closed months ago, and the two remaining transactions - the buyouts of Odeon and Nordic - are being executed by Wanda's USA -based AMC unit, which trades on the New York Stock Exchange and would appear to be outside the reach of Chinese regulators.

The government is increasing a crackdown on capital outflows in a politically sensitive year in China.

On June 20, China's banking regulators told the country's major state-owned banks that stricter rules on outbound investment rolled out last November would be applied to the six Wanda deals in question, the Journal reported.

Dalian Wanda has purchased a slew of cinema assets globally, acquiring AMC Entertainment Holdings in the USA and taking a controlling stake in USA film studio Legendary Entertainment a year ago.

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Other Wanda deals included in the order were: US 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.

By blocking Wanda's access to local bank loans, it would appear to prevent the company from getting new financing in connection to deals already closed and would further cloud financing for the two deals not yet closed, a source told Wall Street Journal.

The China Banking Regulatory Commission (CBRC) did not immediately respond to a request for comment.

Wanda's abrupt exit from the amusement park business and offloading of prized hotel assets to a rival developer appears to be a move aimed at trimming the group's heavy debt load, which has put Wanda in the crosshairs of China's regulators and hurt its chances of relisting its main property business, Dalian Wanda Commercial Properties, on a mainland stock exchange.

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