AMC Entertainment: deals not funded by China's Wanda Group
China's Dalian Wanda Group did not fund a spate of deals, AMC Entertainment said late on Tuesday, after reports that Beijing was cracking down on the Chinese firm's overseas business ventures.
Shares of the US cinema chain owned by Wanda dropped by more than 10 percent on Monday after sources said regulators in China had told banks to stop providing funding for several of Dalian Wanda's overseas acquisitions amid broader curbs on companies moving funds overseas.
The curbs on Wanda, announced at a meeting in June, focused on six overseas deals, four of which have already been completed, an internal bank document seen by Reuters showed.
AMC said deals for Starplex Cinemas, Odeon & UCI Cinemas, Nordic Cinema Group and Carmike Cinemas Inc completed between 2015 and earlier this year were fully funded by the firm's own capital and loans from US-based banks.
"At no time was Wanda ever a source of funding for any of these acquisitions or individual theater purchases," AMC said in a statement. Wanda bought AMC for 2.6 billion dollars in 2012, part of a broader push by the Chinese company firm into cinemas.
The cinema chain added it had also "never received committed financing from any bank headquartered in Chinese mainland for any purpose, including for acquisitions." The most recent four deals were funded by loans from syndicates of US banks taken out by AMC and from AMC's own cash reserves.
Beijing is on a major drive to control risks in its financial system, including firms taking on excessive levels of debt to fund overseas deals. Chinese authorities clamped down on capital outflows and overseas acquisitions last year.
Rooted in property, Wanda is one of a handful of Chinese conglomerates that have expanded its business remarkably abroad over the past few years, into areas beyond their original. It is controlled by one of China's richest men, Wang Jianlin.
AMC's chief executive Adam Aron said in the statement that Wanda "does not actively participate in the day-to-day running of AMC" beyond its three seats on the company's board.
"AMC is an American company run from its Leawood, Kansas, headquarters by our management teams located in the US and Europe," he said. AMC is the top cinema chain in the United States, and has around 1,000 theaters around the world.