Financial Associated Press, Oct. 11th (Reporter Li Jie) Yonghui Superstores, in an announcement, has put Wang Jianlin and Wanda Film Holding in the spotlight.

Yonghui Superstores announced on October 10th that the fourth phase equity transfer payment of 0.3 billion yuan for Wanda Commercial Management shares sold by it should be completed by September 30, 2024. Due to Dalian Yujin's failure to fulfill the payment obligation as agreed, it has constituted a breach of contract.

Therefore, Yonghui Superstores issued an accelerated notice to Dalian Yujin, Wang Jianlin, Sun Xishuang, and Dalian One Side Group, requiring Dalian Yujin to immediately pay the amount to the company, and asking Wang Jianlin, Sun Xishuang, and Dalian One Side Group to assume joint guarantee responsibility.

At the same time, Yonghui Superstores will initiate arbitration with the Shanghai International Economic and Trade Arbitration Commission to hold Dalian Yujin, Wang Jianlin, Sun Xishuang, and Dalian One Side Group accountable for their legal responsibilities.

"This incident stems from Yonghui Superstores' previous investment in Zhuhai Wanda Commercial Management, triggering the buyback clause due to a failed IPO. Zhuhai Wanda brought in a third party to complete the buyback from Yonghui, but now there are payment issues with this buyback, hence Yonghui demands that the guarantor of the buyback fulfill their guarantee obligations." Shaan Capital's Executive Director Shen Meng told the reporter.

"The primary party responsible in this incident is Dalian One Side Group, with Wang Jianlin as the guarantor, the primary responsibility does not lie with Wanda." A knowledgeable source told the reporter.

In this regard, Lawyer Wang Yuchen of Beijing Golden Prosecution Law Firm believes that Yonghui's arbitration application to hold Wang Jianlin and others jointly liable for guarantee responsibility needs to be based on contract and guarantee liability clauses. If the agreed conditions for fulfilling the guarantee obligation are met and Wang Jianlin and others are required to assume joint guarantee responsibility by the arbitration award, then Wang Jianlin and others have a payment obligation to Yonghui.

"The equity consideration in this transaction is not nominal. If Wang Jianlin and others need to bear the guarantee responsibility according to the arbitral award, the guarantor will need to fulfill the obligations of the arbitral award with their assets, which will naturally bring considerable financial pressure to related parties. And if they refuse to fulfill the arbitral obligations, Yonghui also has the right to apply for enforcement, which may lead to their related properties being sealed or frozen." Lawyer Wang Yuchen stated.

Yonghui Supermarket's sale of Zhuhai Wanda Commercial Management Group in this transaction can be traced back to the end of last year. In December 2023, Yonghui Supermarket announced the sale of the equity held in Wanda Commercial Management Group to Dalian Yujin Trading Co., Ltd., totaling 1.43% of the shares, with a total transaction price of 4.53 billion yuan.

According to the information from QCC, Dalian Yujin was established on November 30, 2023, as a wholly-owned subsidiary of Dalian Yifang Group, whose actual controlling person is Sun Xishuang, a business friend of Wang Jianlin.

The equity in Zhuhai Wanda Commercial Management held by Yonghui Supermarket was acquired from Dalian Yifang Group. In 2018, Yonghui Supermarket acquired shares of Zhuhai Wanda Commercial Management from Yifang Group, stating the rationale as acquiring prime properties. The book value of the equity investment was 3.918 billion yuan.

Yonghui Supermarket is selling back this equity stake to Sun Xishuang at a high price of 4.53 billion yuan, resulting in a premium of 0.612 billion yuan over 5 years. However, analyst Shen Meng stated that this premium is likely an agreed investment return from the equity buyback.

Sun Xishuang made a move after Zhuhai Wanda Commercial Management failed to successfully go public, triggering the buyback clause. He is seen in the industry as a potential ally of Wanda, assisting in repurchasing Yonghui's aforementioned equity investment.

"In this transaction, Sun Xishuang may have played the role of Wang Jianlin's partner and financial supporter, assisting in the buyback of this equity." Bai Wenxi, Chief Economist of the China Enterprise Capital Alliance China, stated that Sun Xishuang has a long-term partnership with Wang Jianlin, collaborating on multiple projects, including holding shares in Wanda Commercial during its IPO, as well as early investments in Wanda.

According to publicly reported media, Sun Xishuang is considered Wang Jianlin's 'best partner.' As early as 2004, Dalian Yifang Group and Wanda collaborated on developing the Wanda Plaza in Beijing's CBD.

In 2010, Sun Xishuang invested in Wanda Film Holding, holding a 4.2% stake, becoming the second largest natural person shareholder after Wang Jianlin. On December 23, 2014, Wanda Commercial Property, which was not yet renamed, was listed on the main board of the Hong Kong Stock Exchange. Sun Xishuang held a 6.3% stake, making him the only natural person shareholder with a stake exceeding 5%. Subsequently, Wanda and Dalian Yifang Group jointly invested in Changbai Mountain International Tourist Resort, Dalian Jinshi International Cultural Tourism Zone, Xishuangbanna International Resort, and other cultural tourism projects.

The reason why Sun Xishuang acquired the equity of Zhuhai Wanda Commercial Management at a high stock price may be related to his long-term bullish outlook on Wanda Commercial Management and his cooperative relationship with Wang Jianlin. Sun Xishuang and Wang Jianlin have a deep history of cooperation. Sun Xishuang may have decided to purchase these shares based on his confidence in the future development of Wanda Commercial Management and his trust in Wang Jianlin. Bai Wenxi said.

Public information shows that Yonghui has received a total transfer price of approximately 0.891 billion yuan for Wanda Commercial Management shares, including the first phase transfer price of 0.3 billion yuan, the second phase transfer price of 0.391 billion yuan, and the third phase transfer price of 0.2 billion yuan.

The outstanding amount that Sun Xishuang has yet to pay amounts to a high 3.839 billion yuan. According to the sales plan, the remaining payments will be made in 8 installments, with the final payment due on March 31, 2026.

However, the industry believes that with the failure to pay the fourth installment of the equity transfer payment on time, this may indicate that Sun Xishuang's funds are also under certain pressure. As the guarantor, Wang Jianlin may not be able to walk away unscathed.

Some analysts believe that if the 60 billion investment introduced by Wanda Commercial Management materializes, there may be sufficient funds to complete the repurchase of Yonghui.

According to business data, Dalian Xinda Alliance Business Management, the investment introduced by Wanda, completed its business registration change in September. The company's registered capital increased from approximately 16.2 billion yuan to approximately 40.5 billion yuan. After this business change, five out of the eleven directors of the board are senior executives from the Wanda group, and the chairman Huang Dewei and the other five directors are from the newly introduced investment institutions. Wanda remains the single largest shareholder.