(Yicai Global) July 24 -- China Wanda Group will sell 49 percent of Beijing Wanda Investment, the controlling shareholder of Chinese cinema chain Wanda Film Holding, for CNY2.3 billion (USD320 million) to reportedly repay the debts of its real estate arm.

Shanghai Ruyi Film and Television Production reached an agreement with Wanda Cultural Industry Group, Wanda Group’s unit that owns Wanda Investment together with Wanda Group’s founder and Chairman Wang Jianlin, to purchase the 49 percent stake in Wanda Investment, the Shanghai-based producer announced yesterday.

After the transaction, Wanda Cultural will own 49.8 percent of Wanda Investment, Ruyi Film and TV 49 percent, and Wang 1.2 percent.

Online media outlet speculated that the sale was to repay a USD400 million bond of Wanda Group’s real estate arm Wanda Commercial Management Group that matured yesterday. Wanda Commercial Management had over CNY12.3 billion (USD1.7 billion) worth of domestic bonds and USD1.8 billion of overseas bonds as of the end of June.

Analysts believe the goal of Ruyi Film and TV’s investment in Wanda Investment is to benefit from Wanda Film.

Wanda Culture cut its stake in Wanda Film by 5 percent between March and April. This month, Wanda Investment sold CNY2.2 billion worth of Wanda Film shares, equal to 8.3 percent of the total, to Lu Lili, the wife of East Money Information’s actual controller.

Wanda Film announced on July 3 that it expected to have achieved a net profit of between CNY380 million and CNY420 million (USD52.8 million and USD58.4 million) in the six months ended June 30, compared with a net loss of CNY581 million a year earlier, thanks to the recovery of the Chinese film and TV industry.

Shares of China Ruyi Holdings, the parent company of Ruyi Film and TV, [HKG: 0136] were trading up 0.8 percent at HKD2.65 (34 US cents) as of today’s lunch break, after opening up nearly 9 percent. Wanda Film [SHE: 002739] fell 1.9 percent to CNY14.26 (USD1.98).

Editor: Futura Costaglione