China's Debt_ China's Dalian Wanda slashes IPO to $3.9 billion; investors worry about debt

REUTERS

China's Dalian Wanda slashes IPO to $3.9 billion; investors worry about debt

By Elzio Barreto
HONG KONG Mon Dec 8, 2014 4:21am EST



A man shows the way for Wang Jianlin (R), chairman of Wanda, during a meeting with Tencent Chief Executive Officer Pony Ma and Baidu Inc. Chairman and CEO Robin Li, in Shenzhen, Guangdong province, in this August 29, 2014 file photo. Credit: Reuters/Alex Lee/Files

(Reuters) - Dalian Wanda Commercial Properties Co Ltd, the world's second largest developer of shopping malls and office buildings, cut the size of its Hong Kong IPO by around a third to $3.9 billion to lure investors worried about its huge debt, analysts said.

The company, backed by Chinese billionaire Wang Jianlin, launched the deal on Monday and offered 600 million new shares in a range of HK$41.80–HK$49.60 each, according to a term sheet seen by Reuters.

It had earlier sought to raise as much as $6 billion via the deal, Reuters previously reported. Analysts said the company cut the IPO after some buyers were put off by the 179.7 billion yuan ($29.2 billion) in bond and loan debt it had amassed during a decade-long, rapid expansion drive.

Dalian Wanda's gearing ratio, a measure of indebtedness, stood at 87.8 percent at the end of June, according to its draft prospectus, more than double the industry average of 40-50 percent, analysts said.

"Investors will be concerned about the debt," said Alvin Cheung, associate director at Prudential Brokerage in Hong Kong.

The IPO is set to be priced on Dec 16. The share are due to list on Dec 23.

Dalian Wanda's indicative range represents a forecast 2015 price to earnings (P/E) multiple of 7.4–8.9 times, higher than the median P/E ratio of 5.93 for Chinese real estate companies, according to Thomson Reuters data.

A group of 11 institutional investors including the Kuwait Investment Authority (KIA) and Och-Ziff Capital Management Group Ltd (OZM.N) pledged to buy $2 billion worth of shares in the IPO ahead of the launch.

But the debt levels - in addition to the prolonged slump in China's real estate market - may put off retail investors looking for quick gains, analysts said.

"For the retail investors' offering, I don't think people will borrow on margin for the IPO," said Jasper Chan, corporate finance officer at Hong Kong brokerage Phillip Securities. "Most likely the public offer will not be that hot."

(Additional reporting by Clare Jim; Editing by Miral Fahmy)

***

Chân thành cám ơn Quý Anh Chị ghé thăm "conbenho Nguyễn Hoài Trang Blog".
Xin được lắng nghe ý kiến chia sẻ của Quý Anh Chị trực tiếp tại Diễn Đàn Paltalk: 1Latdo Tapdoan Vietgian CSVN Phanquoc Bannuoc . 
Kính chúc Sức Khỏe Quý Anh Chị . 



conbenho
Tiểu Muội quantu
Nguyễn Hoài Trang
09122014
___________
Cộng sản Việt Nam là TỘI ÁC
Bao che, dung dưỡng TỘI ÁC là ĐỒNG LÕA với TỘI ÁC