Tue 02/02/2021 04:21 AM
Share this article:
Dalian Wanda Commercial Management, a subsidiary of Dalian Wanda Group, is planning to issue around RMB 20 billion ($3.096 billion) to RMB 30 billion corporate bonds this year to help redeem a total of RMB 36.7 billion bond maturities in 2021 with the rest of the funding from the company’s own resources, according to two sources familiar with the matter. The company has applied to the China Securities Regulatory Commission for a corporate bond issuance quota of RMB 12.8 billion and expects to receive a response after the Chinese New Year, management told investors during individual meetings, according to the same two sources and meeting memos viewed by Reorg. Continue reading for our Asia Core Credit team's analysis of Dalian Wanda Commercial Management and request a trial for access to our analysis and reporting on hundreds of other stressed, distressed and performing credits in the region.

Dalian Wanda Commercial Management has been preparing to list on the A-share market after its privatization from the Hong Kong stock exchange in 2016, while the company said it does not have a specific timetable yet for the initial price offering and has been negotiating with the regulatory departments, said the sources.

As reported earlier, China Evergrande Group’s agreements with its strategic investors regarding a requirement to repurchase equity interests from investors and China Fortune Land Development’s profit guarantee agreement with Ping An Life Insurance helped precipitate bond price collapses of Evergrande and CFLD. Dalian Wanda Commercial Management stressed that the company does not have any similar agreement with its strategic investors including Tencent.com, JD.com, Suning.com and Sunac China.

Dalian Wanda Commercial Management also disclosed that it plans to open 50 shopping centers under the Wanda Plaza brand this year, with 50% of the plazas located in first or second-tier cities. As of the end of 2020, the company managed a total of 368 Wanda Plazas, which brought in RMB 27 billion revenue and RMB 25 billion rental income during the first three quarters of 2020, according to the memo.

As of the end of 2020, interest-bearing debt of Dalian Wanda Commercial Management had decreased by RMB 8 billion over a year earlier to stand at RMB 175 billion, while the company plans to further reduce debt by RMB 5 billion in 2021. Cash on hand stood at RMB 40 billion to RMB 50 billion on Dec. 31.

In issuances in 2020, bank investors, mainly Industrial and Commercial Bank of China, CITIC Bank, China Merchants Bank and Pudong Development Bank, subscribed to about 60% of the company’s bonds, while non-bank institutions subscribed to 40%.

For the holdco Dalian Wanda Group’s property development subsidiary Dalian Wanda Real Estate Group, the management said that total sales in 2020 reached RMB 81 billion, while it recollected RMB 65.5 billion. The company set 2021 sales target at RMB 110 billion and expects to obtain land parcels valued at RMB 20 billion in 2021.

The real estate group has set up an offshore structure for potential public listing in the Hong Kong stock exchange, and the management guided that the execution plan is still being discussed internally and the company does not expect to have any concrete development in terms of the public listing in 2021.

Meanwhile, Dalian Wanda Cultural Industry Group plans to privatize and delist subsidiary Wanda Sports Group from the Nasdaq market with expected costs of $70 million to $100 million, the same sources added.

The financial statement of the holdco Dalian Wanda Group is expected to be released to investors in May, said the management during the meeting. Below is the capital structure of Dalian Wanda Group:



















































































































































































































































































































Dalian Wanda Group Co - Pro Forma as of 09/15/2020


12/31/2019

EBITDA Multiple

(CNY in Millions)

Amount

US$ Amt.

Maturity

Rate

Book


Guaranteed Loans

214,813.4

30,687.6



Credit Loans

21,486.5

3,069.5



Factoring Loans Due 2026

13,543.4

1,934.8



Total Loans

249,843.3

35,691.9

4.6x

15 Wanda Note 02

5,000.0

714.3

Oct-14-2020

6.600%

15 Wanda MTN 02

5,000.0

714.3

Nov-16-2020

4.250%

16 Wanda Note 01

5,000.0

714.3

Jan-14-2021

5.500%

16 Wanda MTN 01

6,000.0

857.1

Mar-29-2021

3.700%

16 Wanda MTN 02

6,000.0

857.1

Apr-28-2021

4.000%

16 Wanda Note 02

8,000.0

1,142.9

May-06-2021

4.900%

16 Wanda Note 03

5,000.0

714.3

May-24-2021

4.800%

16 Wanda Note 04

3,000.0

428.6

Jun-13-2021

4.750%

16 Wanda Note 05

2,000.0

285.7

Jul-12-2021

4.700%

16 Wanda Note 06

2,000.0

285.7

Jul-27-2021

4.700%

20 Wanda MTN 01

5,000.0

714.3

Apr-17-2023

4.890%

20 Wanda MTN 02

2,000.0

285.7

Jun-03-2023

4.700%

20 Wanda MTN 03

5,000.0

714.3

Jul-10-2023

5.200%

Total Onshore Bonds

59,000.0

8,428.6

5.7x

$550M USD 7.50% Senior Notes Due 2022

3,850.0

550.0

Jul-24-2022

7.500%

$400M USD 6.875% Senior Notes Due 2023

2,800.0

400.0

Jul-23-2023

6.875%

$400M USD 6.95% Senior Notes Due 2022

2,800.0

400.0

Dec-05-2022

6.950%

$600M USD 7.25% Senior Notes Due 2024

4,200.0

600.0

Jan-29-2024

7.250%

$200M USD 8.875% Senior Notes Due 2023

1,400.0

200.0

Mar-31-2023

8.875%

Total Senior Notes

15,050.0

2,150.0

6.0x

Total Consolidated AMC Debt 1

38,796.8

5,542.4



Total Total Consolidated AMC Debt

38,796.8

5,542.4

6.7x

Total Debt

362,690.1

51,812.9

6.7x

Less: Cash and Equivalents

(153,777.6)

(21,968.2)

Plus: Restricted Cash

18,087.4

2,583.9

Net Debt

226,999.9

32,428.6

4.2x

Operating Metrics

US$ Amt.

LTM Reported EBITDA

54,097.9

7,728.3


Liquidity

Plus: Cash and Equivalents

153,777.6

21,968.2

Less: Restricted Cash

(18,087.4)

(2,583.9)

Total Liquidity

135,690.2

19,384.3

Credit Metrics

Gross Leverage

6.7x

Net Leverage

4.2x

Notes:
Reported EBITDA reflects the 2019 full-year reported EBITDA; Sources: company filings, Reorg, Wind
1. Detailed AMC capital structure can be found on AMC's Reorg Coverage Page
US$ Translation: CNY/USD rate used for USD conversion is 7.



--Katherine Shi
Share this article:
This article is an example of the content you may receive if you subscribe to a product of Reorg Research, Inc. or one of its affiliates (collectively, “Reorg”). The information contained herein should not be construed as legal, investment, accounting or other professional services advice on any subject. Reorg, its affiliates, officers, directors, partners and employees expressly disclaim all liability in respect to actions taken or not taken based on any or all the contents of this publication. Copyright © 2021 Reorg Research, Inc. All rights reserved.
Thank you for signing up
for Reorg on the Record!