Wanda Investment, a subsidiary of the privately-owned Chinese property giant Dalian Wanda, has sold an 8.3% stake in Wanda Film Holding for RMB2.2 billion ($306 million).
Wanda Film, which is listed on the Shenzhen stock exchange, operates Chinas largest circuit of multiplexes and retains a stake in Hollywood producer Legendary Entertainment (Dune).
The buyer is Lu Lili, the wife of Shen Jun, the controller of East Money Information, a financial data platform, Wanda Film said in a regulatory filing this week.
The share sale appears to be a move to raise finance for Dalian Wanda and Wang Jianlin, the politically-connected former army officer who built one of Chinas largest property empires and from 2012 mounted a seven-year campaign to own a large chunk of Hollywood.
The Chinese governments move in 2018 to rein in Wang and Dalian Wandas mounting debts brought an end to that battle. Following that intervention, Wanda sold off its Chinese studios and theme parks, some of its Chinese hotels, its Beverly Hills property development and most of its stake in North American cinema chain AMC. In January last year, Legendary brought in outside capital from Apollo.
But, in recent months, debt problems across much of Chinas commercial property sector have led to corporate defaults and slowed the Chinese economys post-COVID recovery. Despite its earlier pruning, Dalian Wanda has not been immune and the group is also attempting to sell is Hoyts cinema chain in Australia.
Over the past month, Wanda Investment also sold 1% of Wanda Film in the open market, while other group units acting in concert sold another 2% stake. Following the latest share sale, the stake in Wanda Film controlled by Wanda Investment and its partners will shrink to 31%. But it will remain Wanda Films largest shareholder.
Chinese cinemas were last year tipped into crisis by the governments tough response to a 2022 surge in COVID cases, rolling lockdowns and other restrictions.
Wanda Film reported a net loss of RMB 581 million ($80.7 million) in the first half of last year. It has recently issued guidance suggesting that it will be able to announce net profits in the RMB380-420 million ($53 $58 million range) for the January-June 2023 period.
Wanda Film reported that box office in China is up by 50% in the first six months of the year and said that its own market share had grown to 16.8%. At the end of March, the company operated 857 theaters in China, with 7,203 screens.
Wanda Film is also Chinas largest operator of Imax theaters. On Wednesday, Imax Corp. announced plans to delist its Hong Kong-traded Imax China subsidiary.