Wang Jianlin finally waited for Rider in White, but at the cost of losing control of Wanda Film (002379.SZ).

At midday trading today, Wanda Film announced that the indirect controlling shareholder Beijing Wanda Cultural Industry Group Co., Ltd. and its wholly-owned subsidiary, Beijing Hengrun Enterprise Management Development Co., Ltd., and Wang Jianlin, the actual controller of the company, intend to transfer 51% of their combined shares in Beijing Wanda Investment Co., Ltd. (“Wanda Investment”) to Shanghai Ruyi Investment Management Co., Ltd. (“Shanghai Ruyi”).

As of the third quarter of this year, Wanda Investment holds 20% of Wanda Film's shares and is the controlling shareholder of Wanda Film. If the final transaction is completed, Wanda Film will officially change ownership.

According to public information, Shanghai Ruyi is a subsidiary of China Ruyi (0136.HK) under an agreement. The latter holds 100% of the actual interests in Shanghai Ruyi, and Li Ming, chairman of the board of directors of China Ruyi, holds 99% of Shanghai Ruyi's shares. Before midday trading, China's Ruyi stock price rose rapidly from HK$1.77 to HK$1.92 per share, a half-day increase of 8.47%.

Formerly known as “Hengteng Network,” China's Confucianism was jointly funded by Evergrande and Tencent. The Evergrande crisis was later revealed, and capital was withdrawn in November 2021. Tencent then became a major shareholder of China Ruyi through three rounds of issuance. Currently, Tencent Holdings (0700.HK) holds 19.12% of China's Ruyi shares through its wholly-owned subsidiary Water Lily.

This means that Tencent is behind the “White Knight” who has taken action one after another to bail out Wang Jianlin.

On July 23 of this year, Shanghai Ruyi transferred 49% of Wanda's investment for 2,262 billion yuan. After penetration, it enjoyed about 9.8% of Wanda Film's shares. Thus, it can be obtained that the last transaction price was about 10.57 yuan/share, which is equivalent to 70% of the closing price of 14.54 yuan/share on the trading day before the announcement.

Assuming an average daily price of 12.64 yuan/share and an 80% discount in the 20 transactions before Wanda Film's suspension, Wang Jianlin expects to receive at least 2.47 billion yuan in cash.

However, this is still a drop in the bucket for Wang Jianlin, who is under pressure to pay. According to public information, if Zhuhai Wanda Business Management Co., Ltd. (“Wanda Business Management”) fails to go public before the end of the year, then Wang Jianlin will have to buy back 30 billion yuan of shares held by investors and pay 12% interest, totaling more than 40 billion yuan. Currently, Wanda Business Management has submitted a statement on the Hong Kong Stock Exchange.

In addition to this, Dalian Wanda Business Management Group Co., Ltd., currently the controlling shareholder of Wanda Business Management, has another three US dollar bonds with a current size of 1.3 billion US dollars.

According to the Financial Association, one of the 600 million US dollars bonds (about 4.257 billion yuan) due in January 2024 has received deferred repayment approval and is expected to be paid off in four installments before December 29 next year. The other two will expire on January 20, 2025 and February 13, 2026, respectively.