Lionsgate and China’s Hunan TV are in advanced talks to strike a three-year film-making pact.

Reuters first broke news of the agreement after China’s Hunan TV & Broadcast Intermediary Co Ltd made a regulatory filing with the Shenzhen stock exchange earlier on Wednesday (January 28), however sources say the deal is a little way off from being done.

It is understood the parties would invest a total of $1.5bn to produce and distribute films.

Lionsgate would help its potential partner to secure a foothold in the US and leverage its international sales operation to provide global exposure for Hunan TV’s Chinese films.

Among other areas, Hunan would contribute funds to Lionsgate’s production roster.

Sources speculated that while Lionsgate would draw upon previously identified production funds in its investment, the deal could result in additional, incremental spend should the companies embark on co-productions in China.

The arrangement does not involve any corporate investment by either company in each other.

Lionsgate was unavailable for comment.