Director to pay $3.3 mil for 2 subsidiaries
HONG KONG — “Election” helmer Johnnie To is going his own way.
The director is planning to buy his way out of Milky Way Image, the stock market-listed company that he owns a part of. He will pay HK$26 million (US$3.3 million) for two subsidiaries Milkyway Image Hong Kong and Luminous Star and take with him his own production team, facilities and production schedule.
The listed group plans to continue producing films through subsidiaries Inspire Film Distribution and Point of View Movie Production, which are both wholly owned subsidiaries of Milkyway Image and are headed by Dennis Law Sau-yiu.
The split needs approval from independent shareholders at an extraordinary general meeting and once approved the listed company will change its name to Brilliant Arts Multi-Media Holding Ltd.
Company says the four subsidiaries have long been run as two separate teams with different supervision and that To’s consistently notched up high overhead costs. Disposal of To’s loss-making portion therefore isn’t expected to disrupt Brilliant Arts’ business.
“(The soon to be renamed company) considers the overhead of Milkyway Image Hong Kong and Luminous Star Ltd. has been at a consistently high level, which has been causing concern,” Milky Way said. “It may not be cost effective to maintain (them) within the group of the company.”
Trading of shares was suspended on April 24 and resumed Friday.