China's Wanda Cinema Line Makes Fresh IPO Bid With Government Regulator
An earlier attempt by Wanda's cinema subsidiary to list on the Shenzhen stock exchange was denied by authorities
China’s biggest cinema chain, Wanda Cinema Line Co., a subsidiary of Dalian Wanda Group, has made a new application with regulators for an initial public offering by issuing 60 million shares on the Shenzhen stock exchange, after an earlier attempt was denied.
The group hopes to raise $330 million in the IPO, which it wants to use for cinema construction and to supplement cash flow, according to documents filed with the China Securities Regulatory Commission.
A previous effort in July was suspended because of insufficient documents.
Dalian Wanda Group, headed by Chinese tycoon Wang Jianlin, is the world largest owner and operator of movie theaters. In 2012, the company bought North America's second-biggest theater chain, AMC Entertainment, for $2.6 billion.
In August the group said it was spending $1.2 billion to develop its Hollywood presence after it won a bid for a plot of land at 9900 Wilshire Boulevard, Beverly Hills, for the HQ of its U.S. entertainment business.
This year has been a mixed year for Chinese IPOs.
The record-breaking Alibaba stock listing on Sept. 19 valued the company at an estimated $25 billion with a market value of roughly $230 billion. Alibaba initially toyed with listing in Hong Kong before heading to New York.
At the start of the year it looked like China had effectively frozen IPOs, after no new companies were granted permission to seek a listing for nearly two months.
China then allowed initial public offerings on the country's two bourses to resume in early 2014 after a hiatus of 14 months, allowing around 50 already approved companies to list on the Shanghai and Shenzhen exchanges.
According to the documents, the cinema line's total revenue from January to June this year was $410 million, while total revenue last year was $660 million.
The IPO prospectus earlier outlined how Wanda Cinema is 68 percent owned by Wanda Investment, in which Wang owns 98 percent. The other 2 percent are owned by his oldest son, Wang Sicong.
In 2012, Wanda acquired AMC Entertainment, and at the time, many viewed the acquisition as a prestige buy on the part of Wang, who had expressed interest in expanding his business internationally, but it proved to be a windfall. Thanks to a record year for Hollywood films in 2013 and an overall rising stock market during the period, Wang saw the value of his controlling stake in AMC more than double in the 18 months after the purchase.