UPDATE 1-China cracks down on Dalian Wanda's overseas deals – sources

UPDATE 1-China cracks down on Dalian Wanda's overseas deals – sources

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BEIJING/HONG KONG (Reuters) – China’s regulators have told banks to stop providing funding for several of Dalian Wanda Group’s overseas acquisitions as Beijing looks to curb the conglomerate’s offshore buying spree, sources familiar with the matter said on Monday. 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 seen by Reuters. 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 will also not be allowed to inject cash from its onshore business to help the offshore subsidiaries, according to the document. Nor will overseas units be allowed to be folded into Wanda’s locally listed firms, it added. Relevant government bodies should not provide support to help Wanda sell its overseas assets to Chinese buyers, according to the bank document. One of the sources said Wanda was perceived to have violated Beijing’s measures brought in last year to tighten controls on money moving out of the country. Wanda declined to comment on the document or its contents. The China Banking Regulatory Commission (CBRC) did not immediately respond to a request for comment. The Wall Street Journal first reported earlier in the day that banks met regulators and were advised of restrictions around Wanda’s assets. This comes after a Reuters report last month that showed CBRC had ordered a group of lenders to assess their exposure to offshore acquisitions by some firms that have been on a buying …read more