“Wanda Group in Negotiations to Extend Debt Repayment Period and Lay Off Employees”

[Compile Wei Guojin/Taipei Report]China’s “Sina Finance” reported that China’s former richest man Wang Jianlin’s Wanda Group is negotiating with banks to extend the debt repayment period. The group will lay off a large number of employees next month, “a conservative estimate is about 30%.” At the same time, it will try its best to increase income and reduce expenditure through pledge financing, cash reduction and other methods. Wang Jianlin, who is in an extremely difficult situation, may follow in the footsteps of Evergrande Xu Jiayin.

According to reports, Wanda’s negotiations with banks have shown that its liquidity pressure has become very severe. In order to alleviate the liquidity crisis, in January, Wang Jianlin and others pledged 65.04% of the shares they held in Wanda Hotel to Singapore sovereign fund Temasek and its subsidiaries. It is estimated that the loan financing value provided by Temasek is about 860 million Hong Kong dollars.

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In addition, Wanda restarted overseas financing that had been suspended for a long time. In January and February, it issued two-year bonds of US$400 million and three-year bonds of US$300 million, while reducing its shareholding in Wanda’s companies. Large-scale layoffs will also be launched in June. Senior executives may be demoted and salary cuts, and vacancies will not be filled.

Despite this, Wanda is still heavily in debt, the report said. According to the financial report of Dalian Wanda Commercial Management Group, in the first quarter of this year, its short-term borrowings were 6.804 billion yuan, an annual increase of 1450%, and non-current liabilities due within one year were 73.037 billion yuan, an annual increase of 338%. However, the company holds monetary funds It is 30.467 billion yuan, which is far lower than the short-term debt.

The reason why Dalian Wanda’s short-term liabilities have surged is due to the spin-off of some businesses in 2021 to establish Zhuhai Wanda Commercial Management. Wang Jianlin promoted the listing of Zhuhai Wanda in Hong Kong, and introduced 22 star investors including Country Garden, Tencent, and Ant to invest 38 billion yuan.

According to the report, Wanda signed a VAM agreement with investors at the time, guaranteeing that Zhuhai Wanda would go public in 2023, but now it has failed to apply for an IPO three times. If Zhuhai Wanda fails to go public, it may repeat the failure of Evergrande to return to the A-share market in 2020, and Wang Jianlin may be like Xu Jiayin, who will be sued by investors and become the executor.