Dalian Wanda Group is selling a 49% stake in its investment arm to local film and TV producer China Ruyi Holdings in an on-going effort to reduce debt.
Wanda is selling the stake in Beijing Wanda Investment for $315M (RMB2.26BN) as part of fundraising efforts to repay debt of $400BN due this past weekend.
Wanda Investment owns a 20% stake in the group’s Shenzhen-listed entertainment division Wanda Film, which operates a cinema chain in China, finances Chinese films and retains a stake in Dune producer Legendary Entertainment.
Earlier this month, Wanda Investment separately sold an 8.3% stake in Wanda Film for $306N (RMB2.2BN). The buyer was Lu Lili, the wife of Shen Jun, controller of financial data platform East Money Information.
Tencent-backed Ruyi invests in movies including recent hit comedy Post Truth and the blockbuster Detective Chinatown franchise, as well as TV series including Nirvana In Fire.
Dalian Wanda, a property developer turned entertainment conglomerate controlled by billionaire Wang Jianlin, once had major ambitions in Hollywood – with plans to invest in U.S. studios and the acquisition of North American cinema chain AMC Theatres and Legendary Entertainment.
However, the group was hit by the Chinese authorities’ clampdown on heavily indebted companies in 2017 and later sold off its Chinese studios and theme parks, its Los Angeles property development and most of its stake in AMC. Legendary brought in outside capital from private equity group Apollo last year.
China’s current debt problems in the commercial property sector and the impact of the Covid-19 pandemic on the exhibition sector have further squeezed Dalian Wanda over the past few years. It is also looking for a buyer for its Australian cinema chain Hoyts.