China's regulators have told banks to stop providing funding for several overseas acquisitions of Dalian Wanda Group as Beijing looks to curb the conglomerate's offshore buying spree, sources familiar with the matter said yesterday.
This is in line with Beijing's measures to control potential systemic risk, including problems posed by domestic companies acquiring more global assets. China launched a clampdown on capital outflows and overseas direct investment last year.
The curbs on funding for Wanda, announced at a meeting in June, focus on six overseas acquisitions, four of which have already been completed, according to an internal bank document.
Banks have been told not to finance the deals or to allow Wanda to use its offshore assets as collateral for financing.
The property-to-entertainment giant, chaired by Wang Jianlin, will also not be allowed to inject cash from its onshore business to help the offshore subsidiaries, according to the document.
Meanwhile, Sun Hongbin, chairman of Sunac China (1918), who is also a major shareholder of cash-strapped Leshi Internet Information and Technology, attended the shareholder's meeting of Leshi yesterday.
Sun said LeEco has a good business though it is beset by some problems at the moment. The first thing it has to do is to reach a deal with creditors so it can stabilize its situation, he said.
He added that there is a chance for LeEco's Le Vision Pictures to work with Wanda.
Meanwhile, China's major stock indexes recouped sharp early losses yesterday as robust economic growth data buoyed earnings prospects for blue chips. Fears of further policy tightening and a flood of public offerings hit early trading.
The blue chip CSI300 index fell 1 percent to 3,663.56 points, while the Shanghai Composite Index dropped 1.4 percent to 3,176.46 points. Both had been down more than 2 percent in early trade.
The Hang Seng index rose 0.3 percent to 26,470.58 points.