US cinema chain AMC Entertainment Holdings Inc has tried to reassure financial markets it is unaffected by its Chinese parent’s debts, saying the US unit has never relied on Wanda Group Co (萬達集團) for financing.
Shares in AMC Entertainment Holdings have fallen this week following reports Chinese regulators told banks that Wanda’s recent foreign transactions conflicted with restrictions on capital movement.
Wanda in 2012 bought a majority stake in AMC for US$2.6 billion.
AMC on Tuesday said in a statement that its three most recent acquisitions were financed by US banks and it never has received loans from Chinese banks.
The company said that Wanda, which also owns Hollywood studio Legendary Entertainment LLC, has three seats on AMC’s nine-member board, but no role in daily management.
“AMC is an American company run from its Leawood, Kansas, headquarters by our management teams located in the US and Europe,” AMC CEO and president Adam Aron said in the statement.
“Wanda does not actively participate in the day-to-day running of AMC beyond the board of directors service of three Wanda executives side-by-side with six American directors,” Aron said.
“We greatly look forward to Wanda’s continued support as an AMC shareholder,” he added.
Regulators in China have tapped the brakes on a string of multibillion-dollar foreign acquisitions by Wanda and other companies, citing concerns they might be taking on too much debt.
Wanda on July 10 announced that it would sell most of its theme parks to a Chinese buyer, Sunac China Holdings Ltd (融創中國控股), for 63.2 billion yuan (US$9.4 billion), but would continue to manage the properties.
Wanda founder Wang Jianlin (王健林) told Chinese business magazine Caixin that the revenue would be used to repay loans.
Wang was quoted as saying that the company’s debt load “at this point isn’t heavy,” but gave no details.
Wanda, which has interests in shopping malls, hotels, real estate and entertainment, became the world’s biggest cinema operator with its purchase of US chain AMC.
It last year added rival Carmike Cinemas Inc in a US$1.2 billion deal.
Tuesday’s statement said AMC paid for the Carmike acquisition with its own cash, borrowing and stock, with no contribution from Wanda.
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