IMAX to sell 20% stake in China unit to boost expansion effort
Last Updated: 2014-04-09 09:46 | Global Times
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A movie theater in Shijiazhuang, capital of North China's Hebei Province, is packed with viewers on November 24, 2013. Photo: IC

IMAX Corp, a Canadian theater company, plans to sell a 20 percent stake in its China unit to further its expansion in the market, the Wall Street Journal reported Tuesday, citing Richard Gelfond, CEO of the big-screen operator.

Two Shanghai-based investment companies - China Media Capital (CMC) and FountainVest Partners - would each buy a 10 percent stake for $40 million each to help IMAX's expansion ambitions as well as an IPO for IMAX's Chinese business, said the report.

China is IMAX's second-largest and fastest-growing market after its home market, contributing 20.7 percent of the company's total theater bases around the world in 2013, according to the company's annual report.

CMC confirmed Tuesday in an e-mail sent to the Global Times that the company has set up a partnership with IMAX, saying "the purchase price for the 20 percent investment is $80 million, to be paid by the investors in two equal installments," which is set to close in early 2015.

FountainVest and IMAX could not be reached by press time.

IMAX is eager to pour more cash and efforts in developing its business in the booming Chinese film market, especially when it is facing increasing competition, Xu Bin, an industry analyst with Shandong-based Qilu Securities, told the Global Times Tuesday.

The Chinese box office in 2013 grew by 27 percent year-on-year to $3.6 billion, making China the second-largest film market worldwide, according to data from the Motion Picture Association of America.

The country's major State-owned China Film Group Corp also found massive opportunities in the market, especially the big-screen 3D segment, which is preferred by more and more audiences. It rolled out a homegrown big-screen format named DMAX in 2012, partnering with Hong Kong-headquartered GDC Technology.

"DMAX has the same features as IMAX and would cost cinemas less in installation, which means cheaper film tickets at the consumer level," said Xu.

RoboCop, a Hollywood film released in China in February, adopted the DMAX 3D format instead of IMAX 3D, priced at 90 yuan ($14.50) for an adult, in comparison to the amount of roughly 140 yuan when it comes to IMAX 3D in Chinese market.

According to media reports, DMAX had been applied to 50 cinemas around China by the end of 2013.

IMAX tapped the market in 2009 and had 173 theater bases run as of December 2013, the NYSE-listed company said in its annual financial report in February. The Canadian company expects to install an additional 239 bases in China by 2021.

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