Shares of AMC Theatres and Legendary Pictures owner Dalian Wanda Group’s publicly traded film company, Wanda Film Holding Co., plunged nearly 10 percent Wednesday before trading was suspended after the Chinese government, which has cracked down on foreign investment in recent months, decided to take a closer look at the financing arrangements of some of its biggest international dealmakers.
Early Tuesday, Bloomberg reported that the China Bank Regulatory Commission asked certain banks for details on loans made to several of the country’s conglomerates, including New York’s Waldorf-Astoria owner Anbang Insurance Group, Fosun International, which owns part of Cirque du Soleil and Wanda. Rumors on Chinese social media that Chinese banks had been ordered to sell Wanda’s bonds.
Wanda posted a statement on its website blaming “vicious” speculation for the sell-off.
“Today, someone on the internet viciously speculated that some banks, including China Construction Bank, issued a notice to dump Wanda’s bonds,” the statement said. “After investigation, banks such as China Construction Bank have never issued such notices, and speculations online are just rumors. We hereby state that all operations are fine, and we sincerely hope that people will not trust or circulate rumors.”
After a multi-year buying spree, particularly in Hollywood, the firehose of Chinese cash coming to the United States has been squeezed, largely by regulators on the other side of the Pacific seeking to keep capital at home — and prevent a weakening yuan — and crack down on some mind-boggling purchase prices.
Wanda’s would-be $1 billion purchase of Dick Clark Entertainment was derailed by capital controls and regulatory issues, as TheWrap exclusively reported in February. Last year, regulators also foiled the company’s plans to fold unprofitable Legendary into its publicly-traded cinema business, leading Wanda to eventually suspend the plan — and former Legendary CEO Thomas Tull to exit. Wu Xiaohui, the chairman of Anbang, has also been detained by government authorities and off the job since June 8.