×
You will be redirected back to your article in seconds

STX Entertainment Files Draft IPO Prospectus in Hong Kong

Robert Simonds’ STX Entertainment has filed a draft prospectus with the Hong Kong Stock Exchange that is expected to lead to an initial public offering of its shares in the coming months.

STX, which counts numerous investors from Greater China among its existing shareholders, would likely become the first U.S.-domiciled Hollywood entertainment firm to list in Hong Kong or China. Hong Kong, a former British colony that returned to China some 20 years ago, has one of the deepest and most orderly capital markets in Asia. It is expected to be one of the top three IPO destinations in the world leader this year.

The draft prospectus shows leading financial institutions J.P. Morgan and Goldman Sachs as sponsors of the share issue. At this early stage there is no requirement for the company to disclose details of the pricing, how much of its equity will be sold to the public or institutions, nor how much finance it expects to raise through the share sale. Subsequent drafts of the prospectus will likely be issued over the coming three or four months, with each adding new layers of detail.

The prospectus describes an early stage growth company, that books film and TV project development and production expenses as pure cost in its profit and loss statement. As the company releases more films into the market, revenues will catch up. It says that once running at full speed, STX expects to release 12-15 typical films per year.

The draft prospectus shows revenues in the financial year to end September 2017 reaching $201 million. Losses in the same period were $11.8 million. The subsequent quarter to end December showed revenues climbing 41% to $93 million, with losses of $28.1 million. Cash on hand at the end of December had expanded to $109 million at the end of December.

STX was founded in 2011, and began operations in 2014 with the backing of TPG Growth and China’s Hony Capital. Subsequent rounds of capital raising have brought in China’s tech colossus Tencent and Hong Kong telco and media operator PCCW as investors. At the end of last year John Malone’s Liberty Global also took a stake. It is understood that none of these investors are looking to sell their shares in the IPO.

The prospectus pitches STX as being built for the new economy, with a focus on mid-budget ($30-40 million) films, and as straddling the Hollywood and China markets from the outset.  STX recently enjoyed rare crossover success with the Jackie Chan-starring U.S.-China co-production, “The Foreigner,” a dramatic action film directed by Martin Campbell. STX’s development project “Killer’s Game” with Jason Statham has financial backing from Tencent. And, upcoming sci-fi picture, “Steel Soldiers” has financial investment from Alibaba Pictures, part of China’s e-commerce giant Alibaba.

 

 

More Biz

  • Bob Bakish Variety Cover Story

    Inside Bob Bakish's Aggressive Turnaround Plan for Viacom

    Bob Bakish was days into his job as CEO of Viacom in late 2016 when he began convening meetings with senior executives to execute a triage effort to save the once-mighty media giant. Paramount Pictures had just posted a $445 million annual loss. Viacom’s cable networks were in danger of being dropped by major distributors [...]

  • Craig Hunegs WB

    Craig Hunegs to Exit Warner Bros. TV Group and Digital Networks (EXCLUSIVE)

    After nearly 25 years in the Warner Bros. family, Craig Hunegs is exiting his post as head of business for Warner Bros. TV Group and president of the studio’s digital networks wing. Hunegs said he has been discussing his exit with Warner Bros. chairman-CEO Kevin Tsujihara for the past several months. At a time of [...]

  • 'Walking Dead' Profits Dispute Heading to

    'Walking Dead' Profits Dispute Heading to Trial

    The long-running legal battle between Frank Darabont and AMC over profits from “The Walking Dead” will run a bit longer, as a judge ruled Monday that the case must go to trial. Darabont and CAA sued the network back in 2013, arguing he was deprived of $280 million in profit participation because AMC did not [...]

  • Steven Wilson Ron Hofmann Hayley Antonian

    PR Vets Steven Wilson, Ron Hofmann, Hayley Antonian Leave BWR to Form New Agency

    BWR’s Steven Wilson, Ron Hofmann, and Hayley Antonian have announced the formation of a new communications company, Scenario, headquartered in Los Angeles and New York. Together, Wilson, Hofmann, and Antonian will serve as co-presidents while providing integrated communication strategies for clients across the entertainment, lifestyle, and technology industries. Entrepreneur and business strategist Brian Lee will work alongside [...]

  • NEW YORK, NY - SEPTEMBER 06:

    Endeavor Promotes Mark Shapiro to President

    After four years overseeing content operations at IMG, Mark Shapiro has been promoted to president of Endeavor. Shapiro’s elevation to the newly created post comes as Endeavor has expanded dramatically during the past few years, starting with its acquisition of IMG in 2014. Endeavor is now the parent company of WME, IMG, UFC and other [...]

  • Rhapsody, Sony Music to Launch Spotify

    Rhapsody, Sony Music to Launch Spotify Competitor in Japan

    Rhapsody and Sony Music Entertainment today announced a partnership to launch what they describe as the first on-demand, high-resolution streaming music service in Japan. Rhapsody International is providing its “Powered by Napster” platform including a set of systems, tools and APIs to allow SMEJ to quickly launch and bring its on-demand service to market. The service, [...]

  • China's Alibaba to Take Majority Control

    Alibaba to Take Majority Control of Alibaba Pictures

    Chinese e-commerce giant Alibaba is to take majority control of its films unit Alibaba Pictures. The $160 million (HK$1.25 billion) deal was announced Monday. The companies said that Alibaba would increase its stake in Hong Kong- and Singapore-listed Alibaba Pictures through a share subscription. It will lift the parent company’s stake from 49% to 51%, [...]

More From Our Brands

Access exclusive content