Dalian Wanda unit’s Hong Kong IPO application lapses for the third time, bonds come under further pressure
- The deadline to list Zhuhai Wanda Commercial Management Group lapsed on Tuesday, the Hong Kong stock exchange said
- Parent Dalian Wanda Commercial’s bonds sink further after they were hit by rumours of possible delay to trust loan repayments last week
Chinese conglomerate Dalian Wanda Group has failed to list its management unit in Hong Kong for a third time.
The initial public offering (IPO) application of Zhuhai Wanda Commercial Management Group, controlled by Dalian Wanda Commercial, the group’s commercial property management arm, had “lapsed” on Tuesday, according to the Hong Kong stock exchange.
Wanda, founded by Chinese tycoon Wang Jianlin, had failed for the third time to list its subsidiary as it did not submit the relevant listing documents within six months of the mandatory deadline.
The company said in a written reply to the Post’s request for comment that it would submit listing documents to the exchange as soon as possible.
Zhuhai Wanda had filed an application with the Hong Kong exchange at the end of October, aiming to raise up to US$4 billion. Dalian Wanda Commercial owns 69.66 per cent of Zhuhai Wanda.
The company had submitted the prospectus twice before in October 2021 and April 2022.
The latest setback means Zhuhai Wanda will have to start all over again – a costly process that will further delay its listing. The group’s senior executives said during a roadshow of its high-yield US dollar bond in February that they were committed to completing the IPO in the second quarter.
If Zhuhai Wanda fails to list by the end of 2023, it could find itself in deeper trouble. The company will have to repurchase 30 billion yuan (US$4.4 billion) of equity from its pre-IPO investors, according to its IPO prospectus.
The China Securities Regulatory Commission too had questioned Dalian Wanda in March about the delay to Zhuhai Wanda’s IPO and its impact on Dalian Wanda Commercial’s debt repayment capability.
The offshore bonds of Dalian Wanda Commercial Management have been under pressure since speculation in the market grew louder last week about the delay to Zhuhai Wanda’s IPO and possible extensions to onshore trust loans.
Dalian Wanda is viewed favourably by investors in China’s junk-bond market because it focuses on commercial real estate and asset-light property management businesses, rather than residential development.
Wanda Group firm’s bonds slide on loan extension concerns, unit’s IPO deadline
Dalian Wanda Commercial tapped the offshore credit market twice this year, issuing a US$300 million bond in February after a US$400 million note in January.
The US$300 million notes due February 2026 were traded at 61 cents on the dollar on Tuesday, compared with 78 cents on April 17, while the US$400 million notes due January 2025 were trading at around 63 cents, compared with 82 cents last week, according to data provider Dealing Matrix International.
