EMI Group, the world'sthird-largest music company, plans to buy a stake in Hong Kong film maker anddistributor Golden Harvest Entertainment.
Golden Harvest said in astatement on Monday it wants to raise US$4.9m (HK$38m) via the issue of 155million new shares to Typhoon Music (PRC) Ltd. which is jointly owned by EMIGroup and EMI Music South East Asia's Chairman.
When the transaction is completed, Typhoon Musicwill hold a 14.91% stake in Golden Harvest, making it the third largestshareholder after founder Raymond Chow's 24.11% and Hong Kong tycoon Li KaShing's 17.13% stake.
Golden Harvest will use proceeds to repay debt aswell as to set up a new company. Following a joint venture agreement, GoldenHarvest is establishing a 60:30:10 new company with Abba Movies and TyphoonMusic to provide loans for the production of Chinese-language movies.
Abba Chan, the concert promoter who owns AbbaMovies, has previously invested in Golden Harvest's films, including MyLucky Star starring Tony Leung, Miriam Yeung and Ronald Cheng. The latterhas also starred in 2003 box office hit Dragon Loaded and the recentcomedy Super Model, both of which are produced by Chan's Abba Movies andhis partner Paco Wong's Gold Label. The singer/actor is the son of NormanCheng, chairman and CEO of EMI Music South East Asia which jointly owns TyphoonMusic with EMI group plc.