(Bloomberg)—Bonds and shares of Dalian Wanda Group Co. units fell after Chinese media reported that its billionaire Chairman Wang Jianlin and his family were stopped at Tianjin airport near Beijing as they were about to depart for London on Friday. A company denial helped the assets rally later in the day.
The $600 million of 2024 notes sold by Wanda Properties International Co. dropped as much as 3 cents on the dollar to 98 cents, the lowest since July 19, before paring losses to 99.7 cents as of 5:45 p.m. in Hong Kong. Shares of Wanda Hotel Development Co., Wanda’s only traded unit in Asia, plunged as much as 11 percent and ended the day 8 percent lower.
The real-estate and entertainment group on Monday denied an article by Bowen Press and other reports on Wang’s travel ban, calling the articles “groundless,” according to a company statement posted on its website Monday.
Wanda scrapped plans to buy a land plot in London for 470 million pounds ($606 million) amid the Chinese government’s intensifying scrutiny of overseas investments. The company, along with Anbang Insurance Group Co., Fosun International Ltd. and HNA Group Co., has been under increasing scrutiny this year as the communist party steps up its clampdown on capital outflows to protect the yuan from weakening.
“The company clarified media reports, which helped to stabilize its bonds and stop them from falling further,” said Zhi Wei Feng, Singapore-based head of China corporate credit research at Standard Chartered Plc. “But investor sentiment remains fragile as there is no clear picture of whether the reports are totally groundless.”
Bond Plunge
The 2024 bonds were down 1.4 cents today, extending their losses since the start of June to about 12 cents. Dalian Wanda Commercial Properties’ 2021 yuan-denominated notes dropped 1.5 yuan to 90 yuan on Monday, taking the total decline to 10 yuan since they were sold at par in 2016.
The dollar notes plunged in mid-June when China’s banking regulator asked some banks to provide information on overseas loans to Wanda Group, people familiar with the matter said at the time. They were hit again the following month on news that authorities planned to punish the conglomerate for breaching China’s restrictions on overseas investments by cutting off funding and denying it necessary regulatory approvals, according to people familiar with the matter.
“The bond prices should remain volatile in the near-term due to any headlines,” according to research on Monday from JPMorgan Chase & Co. Investors should watch out for any possible decline in funding availability for Wanda Group, the note says.
--With assistance from Judy Chen.To contact the reporters on this story: Lianting Tu in Hong Kong at [email protected] ;Annie Lee in Hong Kong at [email protected] ;Prudence Ho in Hong Kong at [email protected] To contact the editors responsible for this story: Neha D'silva at [email protected] Beth Thomas, Finbarr Flynn
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