Ambitious Hong Kong producer and distributor Media Asia has found itself a major new backer in eSun Holdings, formerly Lai Sun Hotels International.

The companies said that eSun will pay $12.8m (HK$100m) for 25% of Media Asia - with 20% coming from existing management and a further 5% made up of new shares. eSun will pay a further $2.56m for a 50% stake in Media Asia's Coolala internet operation, which delivers multimedia content and operates a bilingual film and entertainment cyberstore. Of the $15.4m total, $10.3m will be in cash, the balance paid in eSun shares. At the agreed price, Media Asia as a whole is valued at $51.3m.

Media Asia, which has made a speciality of reinventing and upgrading the traditional Hong Kong action movie, has been seeking investment partners for several months and only homed in on eSun in the last few. The cash injection is expected to allow Media Asia to expand its production slate and to grow its distribution operations in the Asia region. It also keeps the company on course for a flotation on Hong Kong's Growth Enterprise Market (GEM) in the fourth quarter of this year.

The link with eSun is also expected to provide Media Asia with new outlets for its entertainment content, notably in broadband.

eSun has targeted media in its rapid diversification away from its core hotels business. Earlier this year it unsuccessfully bid for Village Roadshow's 35% stake in Hong Kong giant Golden Harvest (Screendaily, April 10). In December it set up a webcasting joint venture with another ambitious Hong Kong outfit, China Star Entertainment. This was later scaled back to a licensing arrangement for eSun's standalone webcast project (Screendaily, April 17).