China’s Wanda chairman quoted on HK IPO challenge, bonds lose more on liquidity concerns

By Clare Jim

HONG KONG (Reuters) -Chinese commercial property developer Dalian Wanda Group’s dollar bonds fell further on Monday, as investors remained concerned about prospects for its unit’s Hong Kong listing and its impact on the group’s liquidity.

Wanda chairman Wang Jianlin, once China’s richest man, told an internal meeting on Friday that the unit’s IPO was facing difficulties, and vowed to cut the company’s debt in the next two years, according to one attendee and another person familiar with the speech.

Wang said Wanda would stop acquiring land and halt new property management projects, one of the people added. They declined to be named as they were not authorized to speak to media.

Wanda declined to comment.

Notes due July 2023 of Wanda Properties Overseas dropped to 90.472 cents on the dollar by late Monday from 92 on Friday, according to Duration Finance.

The 2024 notes issued by Wanda Properties International Co slipped to 70.571 cents, while the 2025 notes and 2026 notes issued by Wanda Properties Global earlier this year declined to 59.701 and 56.665, respectively.

Zhuhai Wanda Commercial Management Group Co Ltd, a unit of China’s largest commercial property developer, has applied for an initial public offering in Hong Kong, but now also needs Chinese securities regulator’s approval under new rules introduced this year.

It is not clear when the approvals will be forthcoming.

Debtwire reported last week Wanda was talking to creditors of three offshore loans totalling $1.3 billion about waving their option to demand early repayment if its unit fails to complete the IPO by early May.

A source close to Wanda said on Monday it has agreed with the creditors to extend the IPO deadline to Nov. 30, averting a near-term repayment risk.

Wanda unit’s IPO timing has also drawn scrutiny of China’s securities regulator.

The China Securities Regulator Commission questioned in late March Wanda’s short-term repayment ability. It cited Zhuhai Wanda’s Hong Kong IPO application documents saying that if it fails to list by end of 2023 it will have to repurchase shares worth 30 billion yuan ($4.35 billion) from its pre-IPO investors.

Wanda was given three months to respond.

($1 = 6.9013 Chinese yuan renminbi)

(Reporting by Clare Jim; Additional reporting by Xie Yu; Editing by Muralikumar Anantharaman and Tomasz Janowski)