Investors flee from billionaire Wang’s Wanda shares and bonds

22-JUNE-2016 |HONG KONG

Billionaire Wang Jianlin’s Dalian Wanda Group Co. was in focus on Thursday as the shares and bonds of its units plunged.


Wanda Film Holding Co. tumbled 9.9% in Shenzhen, its biggest loss since January 2016, while Wanda Properties International Co.’s US$600mil 2024 notes plunged 10.1 cents on the dollar to 101.7 cents as of 12:06 p.m. in Hong Kong, the biggest drop on record, according to Bloomberg-compiled data. Wanda Group representatives couldn’t immediately comment.

Both companies are units of Wanda Group, the property-to-entertainment conglomerate that stood out in recent years for making acquisitions in Hollywood such as the purchase of Legendary Entertainment. Wang is China’s second-richest man with a fortune of US$31.1bil, according to the Bloomberg Billionaires Index.

There is speculation about political risks surrounding the Wanda Group, said Castor Pang, head of research at Core-Pacific Yamaichi HK.

“We don’t know if this is true yet. The most important factor of doing business in China is the company’s political stance. It is important for the company to ’stand at the right side’. Political risks are the factor that is most difficult to evaluate in China. Even it is just a rumor, investors will choose to sell off first.”

Wanda Properties’ US$600mil 2018 note also dropped 4.5 cents to 97.4 cents.

“There are rumors going around that some onshore accounts are selling Wanda-related bonds,” said Carol Pang, director of fixed income at Zhongtai International Holdings Ltd. in Hong Kong. “Given the market is jittery on some local companies’ scandals recently, people are simply selling before it’s too late.”

Wanda was the first Chinese firm to own a major Hollywood film production company with the US$3.5bil purchase of “Godzilla”-maker Legendary Entertainment last year. 

In November, Wanda agreed to buy Golden Globe Awards producer Dick Clark Productions for US$1bil. Wanda is the biggest operator of movie theaters in America after his AMC Entertainment Holdings Inc. purchased Carmike Cinemas Inc. - Bloomberg

 

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