(Bloomberg) -- China’s securities regulator is scrutinizing a unit of conglomerate Dalian Wanda Group Co. about $4.4 billion in payments it might have to make if a mainland mall business doesn’t go public in Hong Kong this year. 

The China Securities Regulatory Commission sent a letter to Dalian Wanda Commercial Management Group Co. inquiring about the delayed initial public offering of Zhuhai Wanda Commercial Management Group Co. and how it might affect debt-repayment capabilities. 

Wanda Commercial may have to repurchase about 30 billion yuan of equity from pre-IPO investors if a listing doesn’t happen by the end of 2023, according to a CSRC query posted on its website. S&P Global Ratings cut its ratings outlook on Wanda Commercial last August, saying then that the firm and Wanda Group would face “large liquidity pressure” if Zhuhai Wanda’s IPO was unsuccessful. The ratings firm said it treated 39.5 billion yuan of pre-IPO funds as debt.

The CSRC’s questions come after major developer China Evergrande Group scrapped plans in late 2020 for a backdoor mainland listing, capping a four-year saga that raised fears of a cash crunch. Those worries mushroomed the following year amid the real estate sector’s liquidity squeeze. 

Wanda Group, which has a large property business, initially delayed the unit’s IPO a year ago because of market volatility, Bloomberg reported at the time. The deal could have raised about $3 billion. A third IPO application was filed in October with Hong Kong’s stock exchange, and such requests last for six months before expiring.

A media representative at Dalian Wanda didn’t immediately comment when reached on Wednesday.

Wanda Commercial this week priced a 1.5 billion yuan three-year bond. Another unit, Wanda Properties Global Co., is among the few Chinese developers to issue new dollar notes this year. Both of those new offshore bonds are yielding about 19%, according to prices compiled by Bloomberg. 

--With assistance from Emma Dong, Qingqi She, Jackie Cai and Pei Li.

(Adds details on dollar bond sales in the last paragraph.)

©2023 Bloomberg L.P.