AMC Entertainment has denied recent reports that funding from China’s Dalian Wanda has been used for some of its recent acquisitions.
In a statement released Tuesday, the theater group also said it had completed four of its recent deals to buy Starplex Cinemas, ODEON & UCI Holdings, Carmike Cinemas and Nordic Cinema Group Holding AB. AMC Entertainment was acquired by Dalian Wanda in 2012.
“At no time was Wanda ever a source of funding for any of these acquisitions or individual theatre purchases,” said AMC, adding, “AMC has never received committed financing from any bank headquartered in mainland China for any purpose, including for acquisitions. All committed debt financing for AMC’s three most recent acquisitions were funded by a syndicate of US-based banks with AMC as the borrower without financial guarantees or credit enhancements from Wanda. The fourth acquisition was funded by AMC’s available cash on hand.”
Earlier this week, a Wall Street Journal article stated that the Chinese government is halting Wanda’s overseas deals after regulators met at the big state-owned lenders in June and advised them that six of Wanda’s most recent international transactions were subject to the government’s restrictions on capital outflows.
According to Variety, a document circulated Tuesday (which has since been removed), that appeared to contain instructions to banks to not provide finance for the acquired companies; it also indicated that up to two of the six deals had not been completed.
Additionally, AMC’s statement from Tuesday said that AMC’s “intercompany transactions” with Wanda are “de minimis.” The company stated that as previously disclosed, “Wanda routinely reimburses AMC for general administrative and other expense in what are typically immaterial amounts incurred on behalf of Wanda.”
“The only current vehicle for making payments by AMC to Wanda is through the issuance of dividends, which are offered equally on a per share basis to all AMC shareholders,” the statement read.
Adam Aron, AMC Chief Executive Officer and President, added, “AMC is an American company run from its Leawood, Kansas headquarters by our management teams located in the US and Europe. Our shares are publicly traded on the New York Stock Exchange and our shareholder roster includes some of the biggest U.S.-based institutional investors, as well as Dalian Wanda which owns a majority of our shares. Wanda has been a terrific shareholder, and we are grateful for Wanda’s support of AMC’s efforts over the past few years to grow our business, to increase our profitability, to sustain some 45,000 U.S. and European jobs for AMC employees, and to improve the movie going experience for our more than 350 million U.S. and European guests each year.
“Wanda does not actively participate in the day-to-day running of AMC beyond the Board of Directors service of three Wanda executives side-by-side with six American directors on the AMC Board. Accordingly, recent press reports notwithstanding, we greatly look forward to Wanda’s continued support as an AMC shareholder.”