PE investors make part-exit from IMAX China

In a filing, IMAX China said that Morgan Stanley, the underwriter for the company's 2015 Hong Kong IPO, had agreed to allow CMC and FountainVest to sell 20 million shares in exchange for extending their lock-up period for another three months from the previously agreed expiration date of April 8. The longer lock-up period was sought in hopes of minimizing market volatility when the period expires for other investors.

The shares have now been sold through a block trade, local media reported. No pricing details were given, but based on March 22 closing price of HK$50.45, the investors could have generated around HK$1 billion ($129 million). As of mid-afternoon trading on March 23, the stock was down 7% at HK$47.00.

Both CMC and FountainVest will remain investors in IMAX China, and CMC will continue its partnership with IMAX China and the parent company IMAX Corporation in the IMAX China Film Fund, formed last year to bankroll at least 10 Chinese-language movie productions.

IMAX China raised HK$1.92 billion in its IPO in October, selling 62 million shares at HK$31 apiece. FountainVest and CMC together sold 11 million shares in the offering. The two firms acquired a 20% stake in the company in 2014 for $80 million.

"We are pleased that CMC and FountainVest will continue as strategic investors in our company," said Richard Gelfond, chairman of IMAX China and CEO of IMAX Corporation. "These two funds were the very first investors in IMAX China, and their ongoing position as investors reflects their high degree of confidence in the future prospects and growth potential of IMAX China."

For the year ended December 2015, IMAX China reported revenue of $111 million, up from $78 million the year before. Over the same period the company reported a loss of $171 million, down from a $29 million profit the year before.

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• Topics
• Greater China
• Media
• Open market
• Performance
• China
• Hong Kong (China)
• China Media Capital
• Fountainvest Partners