SHANGHAI (Bloomberg) - Chinese billionaire Wang Jianlin, faced with a quarter of his US$2 billion in Dalian Wanda Commercial Properties Co's overseas debt coming due in March, is selling off the majority of his global hotel and development projects.
So far, three out of five global Wanda projects under development - in London, Sydney and on Australia's Gold Coast - have been agreed to be sold or are nearing sale. That would leave just a hotel, office and apartment complex in Chicago and another in Beverly Hills, California.
Previously such a repayment, of US$510 million worth of bank loans by March 31, would have been a piece of cake for the once-acquisitive tycoon, whose Dalian Wanda Group Co has gobbled up billions of dollars worth of assets including AMC Entertainment Holdings since 2013. Although the commercial property unit has a lower debt-to-cash ratio than some other comparable developers, most of its money is trapped within mainland China, blocked by the country's exchange controls.
"Although its onshore liquidity position is strong, uncertainty over its ability to transfer money offshore adds to the refinancing pressure," said Kaven Tsang, a Hong Kong-based credit analyst at Moody's Investors Service, which cut the rating of Wanda Commercial to junk in September. S&P Global Ratings and Fitch Ratings also downgraded the company to junk in the past few months.
Wanda, which declined to comment for this story, announced on Tuesday it agreed to sell its landmark London real estate development. The company is also nearing a sale of two projects in Australia that will include luxury condos, hotels and shopping malls upon completion, people familiar with the matter said Wednesday. Back in July, Wanda agreed to sell most of its domestic theme park and hotel assets in China for more than US$9 billion.
The group hasn't had many options for raising cash outside mainland China since Wanda Commercial was delisted from the Hong Kong stock exchange in 2016, and since the Chinese government tightened curbs on remitting funds offshore in a bid to stem capital outflows. The company is reapplying for approval from China's National Development and Reform Commission to issue a bond offshore, which it failed to do last year before the approval expired, according to Dennis Lee, a credit analyst at S&P in Hong Kong.
In addition to the March repayment, the company needs to repay a US$1 billion loan in May and $600 million senior notes in November, he said.
"Overall offshore liquidity pressure will remain high for Wanda Commercial throughout this year," Lee said.
Wanda faces another deadline this year - the relisting of the commercial property unit. Wang had privatized the Hong Kong-traded company in 2016 and has been seeking to list it on China's A-share market, where valuations tend to be higher. If the initial public offering fails to happen by September, Wanda has to pay back hundreds of millions to investors.
"The absence of progress on the IPO increases the risks that the group may be extracting value from Wanda Commercial if the group's financial position weakens," said Lee.