Dalian Wanda Group Co. is selling a stake in one of its entertainment units for 2.26 billion yuan ($314 million), on the cusp of a deadline to repay a maturing dollar bond and raising odds the Chinese conglomerate will avoid an imminent default.
Concern over Wanda’s ability to repay a $400 million note by Monday has rocked China’s dollar bond market in recent weeks, driving wild price swings in the conglomerate’s notes and those of some peers. Wanda had until recently been one of the few property-related Chinese issuers to avoid default amid a multiyear debt crisis that has touched nearly every corner of the industry.
Wanda agreed to sell a 49% stake in a unit of Beijing Wanda Cultural Industry Group Co. to China Ruyi Holdings Ltd., according to a Hong Kong exchange filing from the latter on Sunday.
Bloomberg reported last week that a Wanda unit told some creditors it was finalizing an asset disposal to help pay down the dollar bond. People involved in the conversations said the asset wasn’t specified. The note closed last week at 87 cents after falling as low as 53 cents.
The unit, Dalian Wanda Commercial Management Group Co., was lowered from single-B territory last week by S&P Global Ratings and Moody’s Investors Service, the latest in a series of downgrades this month. The mall operator responded on Friday that its operations remain stable and profitability outlook is good.
--With assistance from Dorothy Ma.
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