AMC’s Chinese Owner Gives Up Control Over World’s Largest Cinema Chain
(Bloomberg) -- Dalian Wanda Group Co., the conglomerate founded by Chinese billionaire Wang Jianlin, has given up its majority control over AMC Entertainment Holdings Inc. after the world’s largest cinema chain reported a record loss of $4.6 billion for 2020 amid repeated warnings of insolvency.
Wanda, which bought AMC in 2012 for $2.6 billion, cut its stake and voting power in the company to 9.8% as of March 3, AMC said in its annual report. The group continues to be AMC’s largest shareholder, the cinema chain’s Chief Executive Officer Adam Aron said in an earnings call. As of October, Wanda had held 37.7% of the Leawood, Kansas-based company and 64.5% of its voting power.
Wanda’s dwindling holdings in AMC marks further contraction of the group’s operations outside of China after it sold its last overseas real estate project in Chicago last year. The company, spanning malls, films, sports and theme parks, was among Chinese conglomerates that accumulated some of the world’s largest debts after paying top prices for overseas trophy assets. The conglomerate has been slimming down aggressively since 2017 to pare debt.
“With no controlling shareholder in place, now, AMC will be governed, just as most other publicly traded companies, with a wide array of shareholders,” Aron said during the call.
The core businesses of Wanda have been hit by lockdowns and other pandemic-induced restrictions. AMC racked up the record loss after theater attendance plummeted over 90%. The cinema chain has raised more than $1 billion since December to keep itself afloat and has cut all non-essential spending.
Wanda cut its stake in AMC to 23.1% by the end of December, with a voting power of 47.4%. In February, the group converted all outstanding Class B common stock to Class A common stock, resulting in further downsizing of its holdings, according to the annual report.
The group may still have significant influence over AMC’s management because it sill has two board seats, according to the statement and Aron.
AMC’s stock has surged more than fivefold this year to $11.16, fueled by an investment frenzy led by Reddit users.
At the height of its overseas expansion, Wanda bought landmark assets including Spanish soccer club Atletico Madrid, Hollywood studio Legendary Entertainment and luxury real estates in Beverly Hills and London. Most of these assets have been disposed of. Last year, Wanda also sold its Ironman triathlon business for $730 million.
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