Czech distributor Space Film is set to ink a deal with Germany's Kinowelt International to set up a joint venture that would cover distribution for the Czech and Slovak Republics, according to representatives of both companies.

"In the Czech Republic we have a partner with whom we plan on forming a joint venture as soon as possible, and that's Space Film," Christoph Koelle, a spokesman for Kinowelt International in Munich told Screen Daily.

Petr Zendl of Space Film confirmed the deal, saying he hoped details would be finalised by the autumn but that until then, Space Film would continue Czech distribution of titles for which Kinowelt has Central and Eastern European rights.

In the last year and a half, Kinowelt has establishing joint ventures in Russia, Poland, Hungary and Bulgaria. Kinowelt also has an output deal with the U.S.'s New Line Cinema to distribute all New Line titles, among others.

Both sides also named the Czech firm AQS as a partner in the potential deal. AQS representatives could not be reached for comment. AQS is the acquisitions arm of TV Nova, the largest Czech broadcaster. Space Film would handle theatrical distribution, AQS would handle broadcast distribution, while an AQS subsidiary, Magic Box would handle home entertainment distribution, according to Koelle.

Meanwhile, Czech art-house distributor Sun Film has closed up shop, a sign of the increasing instability of the domestic market for art-house and non-U.S. titles. A representative of Sun Film said the company would most likely cease operations entirely in September due to a shareholder dispute and a depressed market for art-house fare.

The Czech market for Hollywood releases, however, remains stable: The two largest Czech distributors, BontonFilm and Falcon, consistently take a combined market share of 70% thanks to their US releases.