China’s richest man, Wang Jianlin, and his company Wanda, got kicked out of the Chinese lending system. Wanda is in deep trouble, says business analyst Shaun Rein to the South China Morning Post. Both in terms of assets backing up his purchases and political leverage.
The South China Morning Post:
The unprecedented instructions would close off any available avenue of financing for the highly leveraged Wanda, which may have contributed to Wang’s decision last week to sell the majority of his hotel and theme park holdings — including a Harbin park that he’d opened barely two weeks earlier — to Shanxi magnate Sun Hongbin for US$9.3 billion, in what would turn out to be the largest single real estate sale in China’s corporate history.
“Wanda is in a lot of trouble,” said Shaun Rein, founder of the China Market Research Group. “ It remains to be seen how much of their growth was built on real asset development with cash flow and how much purely on borrowing money.”…
“People forget that businessmen need to ensure they are low profile, and always give credit to the Communist Party first,” said Rein of China Market Research Group. “Sometimes as these guys get richer, they forget who’s really in charge.”
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