×
You will be redirected back to your article in seconds

Alibaba, Tencent Increase Stake in China’s Huayi Brothers in $560 Million Deal

Alibaba, Tencent Increase Stake in China's
Image courtesy of Getty

Huayi Brothers, China’s largest private-sector film company, has sold $560 million of new shares to a friendly investment quartet. The four companies include corporate investors Alibaba and Tencent, and institutional investors Ping An and state-backed investor CITIC.

The shares were sold in a private offering Huayi reported to the Shenzhen Stock Exchange on Tuesday.

It issued 145 million shares at RMB24.83 raising RMB3.56 billion ($556 million). The shares will be subject to a 36-month lockup period.

The company, which has a co-financing deal in the U.S. with Bob Simmonds’ STX Entertainment, said that the proceeds would be used to expand its production slate by a further dozen films, and to pay down $78 million of bank debt.

The investment is a follow-up to an earlier deal with the same four investors back in November last year. Following the deal, Huayi said that it will further increase cooperation with them in games and e-commerce.

Tencent bought 51.7 million shares, taking its stake to 8.06%. That makes it the second largest shareholder behind co-founder Dennis Wang, and ahead of his brother Wang Zhonglei. Alibaba bought 62 million shares, making it the fourth largest shareholder with 4.47% of the company.

To mark the deal, Huayi also held a ceremony attended by director Feng Xiaogang and actor Zhang Guoli.