FINANCE

Debt Woes Mount for Troubled Property Group Wanda

Published: Jan. 13, 2025 8:33 p.m. GMT+8

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Signage at a Wanda Plaza shopping mall in Shanghai on May 9, 2023. Photo: Bloomberg

Dalian Wanda Group Co. Ltd., the debt-ridden real-estate-to-entertainment conglomerate, is being taken to court over its failure to repay 2.7 billion yuan ($368 million) to a unit of investment group Intime International Holdings Ltd., in a dispute over the sale of a stake in a local insurance company.

In addition to seeking a compulsory enforcement order against Wanda for non-payment, China United Industrial Investment Co. Ltd. has also requested the imposition of consumption and spending restrictions (“限高”措施) on Wang Jianlin, Wanda’s chairman and previously one of China’s richest men, for failing to fulfill the group’s legal obligations, sources close to the matter told Caixin.

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Dalian Wanda Group faces a legal battle after failing to repay 2.7 billion yuan to Intime International over a stalled insurance stake sale.
Wanda is involved in four equity disputes, collectively amounting to 25 billion yuan, with pending arbitration cases related to IPO agreements.
The company has been selling assets and renegotiating bonds to alleviate liquidity issues since 2017, with ongoing regulatory challenges impacting financial recovery efforts.

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Who’s Who

Dalian Wanda Group: Dalian Wanda Group Co. Ltd. is a debt-ridden real estate and entertainment conglomerate facing legal issues for failing to repay 2.7 billion yuan to Intime International Holdings. The group has been selling assets, such as financial services, international real estate, cinemas, malls, and hotels, to address its liquidity crisis. Legal disputes and regulatory hurdles have complicated its asset sales, particularly regarding shares in Aeon Life Insurance.

Intime International Holdings: Intime International Holdings is a major privately owned Chinese investment company with investments in the inPARK shopping mall brand and the Beijing Yintai Center, a key commercial complex. It is involved in a legal dispute with Dalian Wanda over a failed 8 billion yuan stake purchase in Aeon Life Insurance.

Yonghui Superstores: Yonghui Superstores Co. Ltd., one of the companies mentioned in the article, submitted an application to an arbitration commission demanding repayment of 3.6 billion yuan from Dalian Wanda Commercial Management Group Co. Ltd. related to IPO bet-on agreements. These agreements involve performance targets tied to a company's IPO, with penalties or compensation if those targets are not met.

Suning.com: Suning.com Co. Ltd. is one of the companies seeking arbitration against Dalian Wanda Commercial Management Group Co. Ltd., demanding repayment of 5 billion yuan. This dispute is related to IPO bet-on agreements, where performance targets tied to a company's IPO were not met. Suning.com's claim is one of the several financial challenges facing the Wanda Group, contributing to its current legal entanglements and liquidity issues.

Sunac China Holdings: Sunac China Holdings, a Hong Kong-listed company, is involved in a legal dispute with Dalian Wanda Group. Sunac has submitted an application to arbitration commissions seeking repayment of 9.5 billion yuan related to IPO bet-on agreements involving Wanda subsidiary Dalian Wanda Commercial Management Group Co. Ltd. Bet-on agreements involve performance targets tied to a company's IPO, with penalties or compensation if targets are unmet.

Dalian Wanda Commercial Management Group: Dalian Wanda Commercial Management Group Co. Ltd., a subsidiary of Dalian Wanda Group, is involved in IPO bet-on agreements with companies like Yonghui Superstores, Suning.com, and Sunac China Holdings. These agreements stipulate performance targets tied to an IPO, with penalties if unmet. Amid Wanda's financial struggles, the group faces demands from these companies seeking repayment totaling 18.1 billion yuan related to these agreements.

Aeon Life Insurance: Aeon Life Insurance Co. Ltd is an insurance company whose 34.6% stake was sold by Dalian Wanda Group to China United Industrial Investment for 8 billion yuan. Regulatory approval of this transaction was stalled due to historical violations by Aeon Life’s shareholders, including using borrowed funds for share purchases. Consequently, Wanda faced legal consequences for failing to repay the owed amount when the deal did not receive regulatory clearance.

China United Industrial Investment: China United Industrial Investment Co. Ltd. is a unit of Intime International Holdings Ltd., one of China's largest privately owned investment companies. It bought a 34.6% stake in Aeon Life Insurance from Wanda for 8 billion yuan in 2019. However, the deal fell through due to regulatory disapproval, and China United is seeking court enforcement for a 2.7 billion yuan repayment and a funding occupancy fee from Wanda.

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What Happened When

2014-2015：: Wanda and its affiliates accumulated holdings in Aeon Life and controlled about 50% of its shares

2017：: Wanda hit by a liquidity crisis due to intensified government scrutiny of excessive overseas investment by Chinese conglomerates

2019：: Wanda agreed to sell a 34.6% stake in Aeon Life to China United Industrial Investment

March 2022：: Wanda and affiliates agreed to repay 1 billion yuan with a supplementary agreement to refund the remaining 7 billion yuan if the deal was not approved by the end of August 2022

End of August 2022：: Deadline for the refund agreement passed without payment from Wanda

End of 2022：: Further investigations into Aeon Life's investment activities were carried out

Second half of 2023：: Financial regulators took compulsory regulatory measures against some shareholders for using funds that did not come from their internal resources to purchase stakes

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