(Yicai Global) May 25 -- Wanda Group has denied an online rumor that the cash-strapped Chinese real estate developer plans to sell 20 shopping malls for up to CNY16 billion (USD2.3 billion) to boost liquidity. It follows a string of negative publicity in which the developer has been reported to be laying off staff and to be in talks with banks about extending loans.
Wanda is considering selling 20 of its Wanda Plaza shopping malls in Shanghai as well as eastern Jiangsu and Zhejiang provinces for between CNY700 million (USD99.3 million) and CNY800 million each, according to rumors circulating on social media yesterday. One plaza in Shanghai could fetch CNY1 billion. Wanda will get as much as CNY16 billion if the plan works.
The rumors are untrue, Beijing-based Wanda said on its website today.
Wanda has recently been dogged by negative rumors. It was recently claimed that Wanda is in negotiations with banks about extending the maturity dates of loans for some of its property projects. The developer has yet to respond, but a source close to the firm said that he is aware of some domestic debts.
And earlier this month the firm refuted another online rumor that it is about to slash its headcount by 30 percent. But a company insider said that although Wanda is slightly reducing the number of staff in some departments, other divisions are expanding.
There are market concerns that Wanda does not have enough money to pay its debts. Unit Dalian Wanda Commercial Management Group has CNY6.8 billion (USD961.6 million) in short-term loans and CNY73 billion (USD10 billion) of other liabilities due by March 31 next year, nearly triple the CNY28.3 billion that the firm holds in cash and cash equivalents, according to data platform Qyyjt.
Hanging in the balance is whether Dalian Wanda Commercial’s property services subsidiary, Zhuhai Wanda Commercial Management Group, in which it holds a 70 percent stake, will ever go public or not.
The unit’s third application to list on the Hong Kong Stock Exchange lapsed on April 25, although the subsidiary has said that it will refile as soon as possible. According to Hong Kong bourse regulations, it has three months to do so for this not to count as a separate application.
Should Zhuhai Wanda Commercial not manage to float before the end of the year, it is obliged to buy back shares worth CNY30 billion (USD4.2 billion) from its pre-IPO investors. Given the current situation, it is uncertain whether it will be able to avoid this expensive share buyback.
Editor: Kim Taylor