SHANGHAI, April 8 (Reuters) - Canada-based IMAX Corp plans to sell a fifth of its Chinese subsidiary to local investors who could help the cinema chain eventually list the unit in Hong Kong, IMAX chief executive told the Wall Street Journal.
The company, famous for 3D projection, will sell 20 percent of IMAX China Holding Inc to investment fund China Media Capital and private equity firm FountainVest Partners, CEO Richard Gelfond was quoted as saying in an interview.
The two investors will each pay around $40 million for stakes of 10 percent by early 2015, the WSJ reported on Tuesday.
IMAX, China Media Capital and FountainVest Partners could not immediately be reached for comment. Gelfond did not respond to emailed queries.
China is IMAX’s fastest-growing and second-largest market, accounting for around 20 percent of revenue, the company’s 2013 earnings report showed. Sales there rose 25.7 percent to $56.5 million last year, versus a slight dip in the United States.
The cinema chain is looking to list its Chinese subsidiary in Hong Kong in the next five years but has not ruled out a mainland listing in Shanghai or Shenzhen, the Wall Street Journal reported.
IMAX has over 170 screens in China and plans to open around 240 over the next five years, to tap a local box office which China’s film bureau put at around 21.8 billion yuan ($3.51 billion) last year.
IMAX is also looking to increase its footprint in China by extending its reach into home theatre in partnership with Shenzhen-based TCL Multimedia Technology Holdings Ltd.
China Media Capital, one of the potential investors, is headed by businessman Li Ruigang, who is also involved in a Chinese joint venture with U.S. film studio DreamWorks Animation SKG Inc.
$1 = 6.2123 Chinese Yuan Reporting by Adam Jourdan; Editing by Christopher Cushing