Legendary Pictures chief Thomas Tull has secured his latest round of funding for his Asian banner, Legendary East, raising $220.5 million over the weekend from Hong Kong’s Paul Y. Engineering Group, in exchange for a 50% stake in the entertainment venture.
It’s the latest example of Hollywood’s growing influence in one of the world’s fastest growing film markets.
One of PYE’s towers, Hong Kong’s fifth tallest skyscraper the Center, was used as a location in “The Dark Knight,” which Legendary co-financed with Warner Bros.
Either way, PYE’s investment should give Legendary the necessary backing to get its first slate of films off the ground.
In June, Tull paired up with Chinese-born Hong Kong media and finance entrepreneur Kelvin Wu to launch Legendary East to produce one or two English-language pics a year that tap into Chinese culture. First releases, which have not yet been revealed, are being prepped to bow sometime in 2013, with a $225 million credit facility now being raised to fund the first titles and overall operations.
Legendary East will enable Tull to bypass Chinese government restrictions that put a 20-pic limit on foreign films that can play in the country’s theaters, and enable him to benefit from the growing box office in the region.
Wu, formerly of Orange Sky Golden Harvest Entertainment, serves as Legendary East’s CEO, and is a principal at private equity firm AID Partners, which has entered into a “subscription agreement” to invest $35 million in PYE and will become a significant shareholder in the company.
PYE is publicly traded on the Hong Kong stock market and will raise the Legendary East funds by placing new company shares with private equity firm AID Partners, and through UBS AG, to other institutional and professional investors.
Legendary East’s financial advisors Centerview Partners and Goldman, Sachs & Co. helped facilitate the deal.
After PYE’s investment, Legendary East’s management will control 40.1%, while Huayi Brothers Intl has 9.9%.
Huayi Brothers, a leading Chinese film conglom, serves as Legendary East’s co-production and distribution partner in China, while Warners Bros. will release the films around the rest of the world.
Tull called the PYE investment “another important milestone following the recent announcement of Legendary East’s formation. We share a common vision with PYE — that with China’s rapid economic growth and rich cultural background, this is a filmmaking marketplace on the rise. We are committed to China and the surrounding region for the long run, and to producing entertainment that is globally appealing in quality, scale and impact.”