You will be redirected back to your article in seconds

Shares of China’s SMI Culture Plunge After Acquisition News

HONG KONG — SMI Culture, a sister company to mainland China multiplex operator SMI Corporation, has unveiled a stock issue and the acquisition of a film production company in Beijing.

Shares of SMI Culture had been suspended from trading on the Hong Kong Stock Exchange for some two months, but plunged by more than 50% on news of the deal and the complicated series of capital reconstruction manoeuvres that accompany it. Shares closed Monday trade at HK$0.485 each.

SMI Culture is to pay HK$360 million (US$46.5 million) for a 35% stake in Grand Astute, a holding company which owns two parcels of land in Huairou, near Beijing and a complex on the site, and film and TV investment company Stellar Mega. Grand Astute is principally controlled by Qin Hui, a Chinese businessman who controls both SMI Culture and SMI Corporation.

At the same time, heavily loss-making SMI Culture will eliminate its share premium account, consolidate its capital, relocate its domicile from the Cayman Islands to Bermuda and launch a HK$788 million (US$102 million) rights issue. Losses have exceed HK$600 million or US$77 million in each of the past two financial years.

One prominent stock broker Francis Lun, CEO of Lyncean Securities, criticized the deal-making. “The main issue is to dilute the minority shareholders,” and drive down the stock price, Lun told the South China Morning Post. “Then the large shareholder will have the opportunity to buy back at a lower price.”

SMI Culture said that HK$350 million (HK$45.2 million) of the rights issue proceeds will be poured into film and TV production, via SMI Culture and Stellar Mega.

It says it is in non-binding preliminary negotiations to invest HK$191 million (US$24.7 million) into eight feature film projects and HK$156 million (US$20.1 million) into six TV series with unnamed parties in China.

Stellar Mega has a track record as a film investor, but also spans property and the drinks business. “The principal assets of Stellar Mega are the properties and its investments in Stellar Tourism, Stellar Hotel and Stellar Beverage. It is principally engaged in the provision of television programme and film production facilities leasing services. Since its establishment, Stellar Mega has participated in the production of over 600 movies and television programmes in total,” SMI Culture said in a regulatory filing.

More Biz

  • Courtney Kemp Agboh'Power' TV show final

    Christine Baranski, Karey Burke and Courtney Kemp Set for Brandon Tartikoff Awards

    Christine Baranski, “Power” creator and showrunner Courtney Kemp and ABC Entertainment chief Karey Burke are among the five recipients set for the 2020 Brandon Tartikoff Awards, to be handed out in January as part of the annual NATPE conference in Miami. Jeff Zucker, chairman of news and sports for WarnerMedia and president of CNN Worldwide, [...]

  • BMI’s Charlie Feldman Retiring After 31

    BMI’s Charlie Feldman Retiring After 31 Years With Company

    Charlie Feldman, BMI’s Vice President of Creative in New York, announced today that he will retire from the company at the end of the year. A 31-year veteran of BMI, Feldman will continue to consult for the company in the new year, according to the announcement. Mike O’Neill, President and CEO of BMI, said, “I [...]

  • Chuck Lorre, Scott Stuber to Keynote

    Chuck Lorre, Scott Stuber to Keynote Variety Innovate Summit

    “The Big Bang Theory” co-creator and TV producer Chuck Lorre and the head of Netflix Films Scott Stuber will keynote Variety’s Innovate Summit presented by PwC on Dec. 5 in Los Angeles. Lorre will share the career experiences that lead to his co-creating and executive producing “The Big Bang Theory,” “Young Sheldon” and “Mom.” Lorre’s extensive [...]

  • Adele Haenel Adèle Haenel

    Accusations Against Roman Polanski, Other Filmmakers Propel #MeToo in France

    When the Harvey Weinstein scandal broke two years ago, the news was mostly met in France with a Gallic shrug. Screen icon Catherine Deneuve even denounced the #MeToo movement as creating a “totalitarian” environment. But bombshell accusations this month from actors Adèle Haenel and Valentine Monnier may finally have turned the tide in the local film [...]

  • Subhash Chandra Chairman of the Zee

    Another 16% Slice of India’s Zee to be Sold by Essel

    The Essel Group is to sell a further 16.5% stake in Zee Entertainment Enterprise Limited, India’s largest private sector broadcast group. The debt-reduction move comes just months after Essel auctioned off an 11% tranche of ZEEL. “The Group seeks to sell up to 16.5% stake in ZEEL to financial investors, in order to repay loan [...]

  • Frank Cicha

    Listen: Why Fox Television Stations Embraced Trial and Error in Daytime

    Frank Cicha, head of programming for Fox Television Stations, saw the future coming nearly a decade ago when Fox’s TV station group committed many millions to land syndication rights to “The Big Bang Theory” back in 2010. Even then, it was clear that big hits on the scale of “Big Bang” were going to be [...]

  • Jussie Smollett

    Jussie Smollett Files Malicious Prosecution Counterclaim Against City of Chicago

    Jussie Smollett has filed a counterclaim against the city of Chicago, several Chicago Police Department officers, and brothers Abimbola Osundairo and Olabinjo Osundairo claiming that he was the victim of a malicious prosecution that caused him “humiliation, mental anguish and extreme emotional distress.” The filing document, obtained by Variety, alleges that the Chicago P.D. “obtained false and [...]

More From Our Brands

Access exclusive content