By NIU Yu

Dalian Wanda Commercial Management, a unit of China's largest commercial real estate developer, has succeeded in scraping together US$400 million (28.5 billion yuan) to make due bond repayments. For some time now, Dalian Wanda Group has been offloading whatever equity it can as a bulwark against a tide of maturing debt.

The monstrosity that is Wanda is complex and convoluted. Ownership and corporate structure have evolved over time. Recent hirings, firings and restructuring plans have left very little behind except hundreds of sparsely-populated cinemas and towering debt that must be serviced. New trauma emerges on a monthly or even daily basis.

Many divisions, subdivisions, subsidiaries, partners, investors and "friends of the family" hold equity in one another. They also owe each other money, above and beyond the unfeasibly large debt acquired from outsiders at home and abroad.

Widely dubbed "too big to fail", the most recent shambles concerns Wanda Cinemas, a cinema chain that also produces and distributes movies. At least two other Wanda entities are also involved in movie production and distribution.

Dalian Wanda Group, the parent company, this week sold 49 percent of its investment arm Beijing Wanda Investment to film and TV producer China Ruyi Holdings for 2.3 billion yuan (US$315 million) as part of fundraising efforts to repay due debt of US$400 billion (2.8 billion yuan).

Tencent-backed Ruyi invests in movies including recent hits Post Truth and the Detective Chinatown franchise. Wanda Investment owns 20 percent of Wanda Cinema.

Earlier this month, Wanda Investment sold around 8 percent of Wanda Cinema for 2.2 billion yuan to LU Lili, the wife of SHEN Jun, controller of financial data platform East Money Information.  

A week later, Wanda Investment raised another 2.3 billion yuan by selling another 8 percent of Wanda Cinemas to Shenxian Rongzhi, yet another company controlled by founder of the Wanda Group WANG Jianlin, once considered China's richest man and now 39th on the Forbes' China rich list.

The global film industry was devastated by the pandemic, and many film and television companies have suffered, including Wanda which has made huge losses. Wanda Cinema made profit only in 2021 out of the four years from 2019 to 2022. Accumulated losses over the four years exceed 10 billion yuan.

Wanda Cinemas said in its H1 forecast that it expects revenue in the first six months of this year jump at least 35 percent to 6.7 billion yuan. But Q2 performance fell far behind even the poor performance in Q1. Wanda Cinemas’ performance has not yet returned to the level of 2019 and remains a long way from being able to service the losses incurred.