Hamartia Antidote
ELITE MEMBER
- Joined
- Nov 17, 2013
- Messages
- 35,188
- Reaction score
- 30
- Country
- Location
https://www.ft.com/content/6d1b2e24-b819-11e8-b3ef-799c8613f4a1
Dalian Wanda has struck a deal to cut its stake in US cinema chain AMC Entertainment, as the troubled Chinese group continues a push to sell off assets in a bid to pay down overseas debt.
Under the terms of a somewhat convoluted scheme, AMC said on Friday it will borrow $600m from private equity group Silver Lake through a convertible bond and use the proceeds to buy back a portion of Wanda’s stake.
Some $421m of the money raised have already been used to acquire 24m AMC class B shares from Wanda at a price of $17.50 a piece, AMC said. The move immediately reduces Wanda’s stake to 50.01 per cent. That shareholding could eventually be reduced to 38 per cent if the convertible notes issued to Silver Lake are fully converted into AMC class A shares.
Once a pure-play property developer, Wanda made a big bet on sports and entertainment as it anticipated a rising Chinese middle class with demands for more upscale lifestyle and recreation services. It acquired AMC for $2.6bn in 2012 and went on to strike a string of eye-catching deals over the next five years before it fell victim to Beijing’s displeasure and concerns about capital flight.
Chinese banks were warned by regulators against lending to Wanda last summer — a move that prompted the property-to-media conglomerate to embark on a deleveraging drive. Among the assets sold so far this year include a 17 per cent stake in Spanish football club Atlético Madrid; a $5.4bn stake in a property business to a consortium led by Tencent, the internet and payments group; as well as a $1.24bn minority stake of its cinema subsidiary Wanda Film to tech giant Alibaba Group and a government-backed investor.
Wanda also sold more than $9bn in hotel and tourism assets in China last year to two Chinese property developers.
Shares in AMC were up 1.2 per cent at $20.35 in early trade on Friday.
Dalian Wanda has struck a deal to cut its stake in US cinema chain AMC Entertainment, as the troubled Chinese group continues a push to sell off assets in a bid to pay down overseas debt.
Under the terms of a somewhat convoluted scheme, AMC said on Friday it will borrow $600m from private equity group Silver Lake through a convertible bond and use the proceeds to buy back a portion of Wanda’s stake.
Some $421m of the money raised have already been used to acquire 24m AMC class B shares from Wanda at a price of $17.50 a piece, AMC said. The move immediately reduces Wanda’s stake to 50.01 per cent. That shareholding could eventually be reduced to 38 per cent if the convertible notes issued to Silver Lake are fully converted into AMC class A shares.
Once a pure-play property developer, Wanda made a big bet on sports and entertainment as it anticipated a rising Chinese middle class with demands for more upscale lifestyle and recreation services. It acquired AMC for $2.6bn in 2012 and went on to strike a string of eye-catching deals over the next five years before it fell victim to Beijing’s displeasure and concerns about capital flight.
Chinese banks were warned by regulators against lending to Wanda last summer — a move that prompted the property-to-media conglomerate to embark on a deleveraging drive. Among the assets sold so far this year include a 17 per cent stake in Spanish football club Atlético Madrid; a $5.4bn stake in a property business to a consortium led by Tencent, the internet and payments group; as well as a $1.24bn minority stake of its cinema subsidiary Wanda Film to tech giant Alibaba Group and a government-backed investor.
Wanda also sold more than $9bn in hotel and tourism assets in China last year to two Chinese property developers.
Shares in AMC were up 1.2 per cent at $20.35 in early trade on Friday.
We call the shot and can squeeze your neck anytime...
.
