UPDATE 1-Canada's IMAX sells 20 pct of China subsidiary; eyes IPO
(Updates throughout with IMAX statement, quotes)
By Adam Jourdan
SHANGHAI, April 8 (Reuters) - Canada-based cinema chain IMAX Corp said it planned to sell a fifth of its Chinese subsidiary to local investors, in a move that could help it eventually list the unit in Hong Kong.
The company, known for 3D projection, will sell 20 percent of IMAX China Holding Inc to investment fund China Media Capital and private equity firm FountainVest Partners as it looks to expand its theatre network in China and strengthen ties with local industry and government.
IMAX issued a statement late on Tuesday that confirmed a report from the Wall Street Journal earlier in the day.
The two Chinese investors will each pay around $40 million for stakes of 10 percent, with the first of two equal instalments due on Tuesday and the second instalment by early 2015, the statement said. IMAX will keep majority control.
China is the group's fastest-growing and second-largest market, accounting for around 20 percent of revenue, its 2013 earnings report showed. Sales in China rose 25.7 percent to $56.5 million last year, versus a slight dip in the United States.
"At this juncture, it makes sense to bring in Chinese investors to help us better address local market dynamics and further optimize our business in China," IMAX Chief Executive Richard Gelfond said in the statement, adding China was an "enormously complex market".
The cinema chain also confirmed that it planned to list its Chinese subsidiary, without providing further details. Continued...