China’s Dailan Wanda Group is reportedly selling its payments business to boost liquidity.
The multinational conglomerate has held discussions about the sale with prospective buyers that include TikTok owner ByteDance, Bloomberg News reported Tuesday (May 30), citing sources familiar with the matter.
Wanda is looking to sell its digital payments license for around 1 billion yuan ($141 million), though some prospective bidders said that figure could come down during negotiations, the sources told Bloomberg.
PYMNTS has contacted Wanda for comment but has not yet received a reply. Based in Beijing, the company’s businesses include movie theaters, financial services, hotels, construction, financial services, sports and real estate.
The Bloomberg report notes that Wanda is working hard to prevent a liquidity crunch, as it could owe investors around 30 billion yuan if it can’t take its mall business public this year. According to the report, an initial public offering (IPO) for the mall operation has lapsed three times.
The report also says Wanda has been downsizing some parts of its business, reducing staff, and considering the sale of up to 20 shopping malls in China.
The news follows reports from earlier this week that consumer spending in China could take a long time to get back to the place it was before the COVID pandemic.
Although the country eased its pandemic-era restrictions at the end of last year, consumer spending is facing obstacles to its recovery, CNBC reported Monday (May 29), citing analysts from Morgan Stanley.
Among the challenges are the absence of stimulus checks in China, regulations that have wiped out 30 million jobs in the short term and 10 million in the longer term, and a slowdown in the housing market.
The housing market has also been affected by regulations as well. That sector has boosted consumer spending but has been impacted by the government’s efforts to control speculation.
As these factors driving caution among Chinese consumers, the rate of growth of consumer spending is projected to be 9% this year before slowing to 4.8% next year — a rate that is half a percentage point slower than what was seen prior to the pandemic, the report said.