EMI Group To Buy Stake In Golden Harvest

EMI Group plans to buy a stake in Hong Kong-based filmmaker and distributor Golden Harvest Entertainment to become its substantial shareholder.

EMI Group plans to buy a stake in Hong Kong-based filmmaker and distributor Golden Harvest Entertainment to become its substantial shareholder.

Golden Harvest said in a statement on Monday it wants to raise HK$38 million ($4.87 million) via the issue of 155 million new shares to Typhoon Music, which is jointly owned by EMI Group and EMI Music South East Asia's chairman/CEO Norman Cheng.

Following the deal, Typhoon Music will become Golden Harvest's third-largest shareholder with a nearly 15% stake. The two parties will explore the synergies between film production, distribution and music businesses.

The subscription price of HK$0.25 each represents a discount of 13.79% to the stock's last closing price of HK$0.29 each on Wednesday, when it was suspended pending the release of the announcement.

Shares of Golden Harvest, which operates cinemas in Hong Kong, mainland China, Singapore and Malaysia, fell 3.45% on Monday to HK$0.28 when trade in the counter resumed.

Golden Harvest said it plans to use the proceeds to partly repay debt and to fund a new joint venture with an initial paid up share capital of HK$10 million ($1.28 million).

The joint venture, in which Golden Harvest has a 60% stake and Typhoon Music owns a 10% stake, will make loans for Chinese-language motion picture production.

-- Reuters
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