GPs back Hong Kong's Orange Sky Golden Harvest

A third unnamed Chinese investor also took part in the deal, according to a filing. Of the RMB400 million total, half will come from Credit Prosperity Fund, RMB150 million will come from Weiying, and the rest will be contributed by the third investor. The investors will acquire a total stake in the company of 13.79%.

The company plans to use the capital to support future development of its cinema operations business. In addition, the involvement of Weiying will help to promote the company's standing in mainland China's cinema industry and create opportunities for strategic partnerships.

Orange Sky Golden Harvest originated as film studio Golden Harvest, founded in 1970 by Raymond Chow and Leonard Ho. The studio has produced hundreds of movies and helped launch the careers of Bruce Lee and Jackie Chan.

More recently Golden Harvest has shifted its focus from production to film financing and distribution, along with cinema management in Hong Kong and Mainland China. The company changed its name in 2009 after a takeover by Wu Kebo, owner of Orange Sky Entertainment.

In its most recent annual report, Orange Sky Golden Harvest claimed revenues of HKD1.1 billion ($140 million) for the year ended December 2014, up from HKD929 million 12 months earlier. Over the same period profits rose from HKD565 million to HKD641 million. The company recently warned that it expects a net loss of about HKD181 million for the year ended December 2015.

Weiying was founded in 2014 by Tencent, China Cultural Industry Investment Fund and venture capital firm Bison Capital. It works with over 100 film distributors in mainland China and plans to expand its business to other entertainment segments, such as live entertainment and sporting events. Last year the company raised a $105 million Series B round from investors including Tencent, cinema chain operator Dalian Wanda Group, and Beijing Cultural Assets Chinese Film & Television Fund.

Box office revenues in China last year hit a record $6.8 billion, and the country is expected to overtake the US in overall movie ticket sales soon. The growth of opportunities has led investors to eye China's entertainment space. CMC Capital Partners is one of the first GPs to invest heavily in the sector; the firm, which recently part-exited its stake in IMAX China, is currently looking to raise $1 billion - across US dollar and renminbi tranches - for its second fund.

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• Topics
• Greater China
• Media
• PIPEs
• Expansion
• China
• Hong Kong (China)
• CITIC Securities