Group Created with Sketch.
Volume 7 No. 106

Finance

Dalian Wanda agreed to sell a 17% stake in Atlético Madrid, "the latest in a rapid string of disposals by the Chinese conglomerate as it looks to pay down its overseas debt," according to Emily Feng of the FINANCIAL TIMES. Quantum Pacific Group, the shipping and energy conglomerate headed by Israeli businessman Idan Ofer, "will buy the shares for an undisclosed sum." After the deal is finalized, Quantum Pacific Group will see its stake in the club increase from 15% to 32%. Atlético Madrid CEO Miguel Ángel Gil Marín and President Enrique Cerezo "will remain Atlético’s majority shareholders." The club said in a statement, "The decision to divest is part of the global strategy of Dalian Wanda Group." Wanda will continue to be a sponsor for the club and retains a 3% stake in the club. Atlético’s home stadium will continue to be known as Wanda Metropolitano (FT, 2/14). REUTERS' Angus Berwick reported Wanda, along with other major conglomerates including HNA Group and Fosun Int'l, "has faced increased scrutiny of its finances and debts over the past year as Beijing clamps down on what it terms irrational overseas deals." A spokesperson for Wanda "declined to comment." China "abruptly shifted over a year ago" from a policy of providing its domestic conglomerates with "cheap cash to help them to become global champions" toward "tightening capital controls and bank credit." Last month, Wanda Chair Wang Jianlin said that the company "had greatly reduced its debt" and would use its "limited cash" in developing Wanda Plazas, the group’s core business (REUTERS, 2/14). In Hong Kong, Maggie Zhang reported offshore groups wholly- or partly-owned by Wanda have $10.7B in "outstanding long-term debt," according to S&P Global Market Intelligence. Zhao Sheng Law Firm Managing Partner Eric Liu said, "The latest divestment reflects Wanda’s aim to focus on its mainland businesses and get money to ease its liquidity pressure. It is also a move to comply with China’s policy on overseas deals as sports clubs are among the sectors that authorities discourage." He added that "more such divestments" from Chinese acquirers "could be seen to follow Beijing’s call to get out of the sectors it frowns upon" (SCMP, 2/14). In Madrid, Sal Emergui reported Atlético "can be considered the 'most Israeli' club in La Liga." In addition to the team's sponsorship deal with Israeli-owned Plus500, Ofer-owned Quantum Pacific's stake in Atlético has more than doubled (MARCA, 2/14).

Chinese investment fund Orient Hontai Capital reportedly "is close" to finalizing the purchase of a majority stake in Spanish broadcaster and production outfit Mediapro, according to Stuart Thomson of DIGITAL TV EUROPE. Orient expects to finalize the acquisition of stakes held by Torreal, Televisa and Gerad Romy to take a 53.5% stake in Mediapro, which holds the rights to La Liga and Champions League football in Spain and recently acquired the rights to Serie A in Italy. Private equity firm Torreal holds a 22.5% stake, with Televisa holding 19% and founding partner Gerad Romy holding a 12% stake. Co-Founders Jaume Roures and Tatxo Benet will retain their 12% stakes in the Barcelona-based company and "will continue to lead its management." News of Mediapro’s deal with Orient "first emerged last year, but the agreement has yet to be completed." The estimated value of the deal is reportedly about €900M ($1.12B). Mediapro "is likely to post revenues" of about €1.6B ($2B) this year (DIGITAL TV EUROPE, 2/14).