Growing synergies between the Hong Kong and mainland Chinese film industry reached new levels Wednesday with the completion of a complex three-year takeover of legendary Hong Kong shingle Golden Harvest by the mainland’s Chengtian, also known by its English name Orange Sky.
The Golden Harvest Entertainment board formally approved changing the company’s name to Golden Harvest Orange Sky, and in a statement it said the completion of the deal makes it mainland China’s first listed film company.
Golden Harvest is one of the icons of Hong Kong cinema. It was founded by former Shaw Brothers executives Raymond Chow and Leonard Ho in 1970, produced more than 600 films and transformed Bruce Lee and Jackie Chan into household names.
Chengtian is one of the new breed of aggressive players in the mainland biz. In November 2007, Chengtian chairman Wu Gebo acquired a 24.78% stake in Golden Harvest from Chow, becoming the largest shareholder.
Wu took over Chow’s position at Golden Harvest’s helm and began to acquire more equity. By last year, Wu had upped Chengtian’s stake in Golden Harvest to 80%, although he was forced to list some stock on the market because of Hong Kong stock market rules that forbid single investors from holding more than 75% of a company.
The company was listed on the Hong Kong Stock Exchange as Golden Harvest Entertainment, even though it was controlled by Chengtian. The renaming of the company marks the final stage in the takeover.
In June Golden Harvest took over Beijing-based shingle Chengtian Zhihong TV and Film Production and Chengtian Entertainment for nearly $11 million in cash and shares.
The deal involved the transfer of Chengtian Zhihong, contracts of Chengtian Entertainment and its units Chengtian HK, Chengtian Bohong advertising and Zhihong technology to Golden Harvest Motion Pictures.
Zhihong produces TV dramas and was involved in the financing and production of “The Warlords,” “Red Cliff” and other major Chinese pics, as well as various smaller titles.
The move gives Chengtian access to Hong Kong’s stock market, as well as to the territory’s sound financial practices and sophisticated corporate culture, and it also means Golden Harvest is back as a film production company.
The last film produced by Golden Harvest was “My Lucky Star” in 2003, but the group has recently invested with Chengtian in Universe Films’ upcoming “Storm Warriors.”
The group expects to produce three to four small- and medium-sized films annually, as well as work with partners to develop large film projects.
Golden Harvest also has interests in cinemas around the region and is expecting to open 60-70 screens by the end of the year, mainly in eastern Chinese cities such as Suzhou, Hangzhou and Wuxi.