(Bloomberg) -- A unit of Dalian Wanda Commercial Management Group Co. is proposing new terms for its dollar bonds due 2025 to extend the maturity, reflecting the Chinese company’s liquidity challenges amid the country’s property downturn.
Wanda Properties Global Co. is inviting eligible holders of its $400 million, 11% guaranteed bonds to approve some amendments, including extending the maturity to Jan. 12, 2026 from Jan. 20, 2025, according to a filing with Singapore Exchange dated Monday. The company is also seeking to add a mandatory redemption on Jan. 20 of 25% of the aggregate principal amount of bonds then outstanding.
Bondholders’ approval will allow the company to alleviate its near-term liquidity pressure, and “proactively manage” its debt repayment schedule with expected cash flows, the company said in the filing. Wanda Properties has scheduled a bondholder meeting on Dec. 17.
Wanda, which manages almost 500 shopping malls across China through a unit, was once regarded as a rare high-quality issuer in the junk-bond market. While its core business is commercial property management, rather than residential development, the company said it still faces challenges in raising new financing or refinancing existing debt. The property downturn and economic slowdown has adversely affected the group, “in particular its cash flows,” it said.
If the terms aren’t approved, the company and the bonds’ guarantors may not be able to repay the bonds at the original maturity date, and “cross-default provisions” may be triggered, it said.
The company said it expects to use proceeds from the Newland Transaction as a key source for the repayment of the bonds. Bloomberg previously reported that Dalian Wanda Group Co. is close to bringing in new shareholders for its mall operating unit, Zhuhai Wanda Commercial Management Group Co., citing people familiar with the matter.
Investors including PAG, which put about $2.8 billion into the unit in 2021, and incoming parties such as Abu Dhabi Investment Authority and Mubadala Investment Co. would see their combined stake in holding company Newland Commercial Management reach 60%, a statement in March showed.
Wanda’s 11% 2025 dollar bond was indicated at 87.2 cents on the dollar as of Monday morning, down from above 93 cents a month ago.
Last year, Wanda Properties proposed a repayment schedule on a $600 million dollar bond due December, offering to pay 10% of the principal in January 2024, 20% in May, 30% in September and 40% in December. The company has so far met its payment obligations on the bond.
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