South Korean import/production company Taewon Entertainment has announced that it is transferring local distribution rights for Peter Jackson's Lord Of The Rings: Return Of The King from Cinema Service to rival distributor CJ Entertainment.

The switch virtually guarantees CJ Entertainment a third smash hit for 2003, following Memories Of Murder ($26m) and My Tutor Friend ($25m), which currently top the year's box-office rankings.

The first two instalments of the Rings trilogy earned $20m and $26m respectively in South Korea.

Amidst rumours of soured relations between the two companies, Taewon reached an agreement last week to pay Cinema Service $10.1m to re-acquire full rights to the 34 imported titles it had leased to the distributor over the past several years.

In turn, CJ Entertainment agreed to loan Taewon $6.7m in exchange for distribution rights to Return Of The King and six other films.

Although details are not available, it is also believed that Taewon will enjoy a larger share of profits under the new deal.

The other imported titles to be transferred to CJ include Kill Bill, Bulletproof Monk, Philip Kaufman's The Blackout Murders, Nicole Kidman-starrer Birthday Girl, View From The Top with Gwyneth Paltrow, and horror remake The Texas Chainsaw Massacre.

Taewon has also contracted 20th Century Fox Korea to distribute two of its other titles, Kate And Leopold and Brian De Palma's Femme Fatale, while maintaining that it will choose distributors for its future acquisitions on a case-by-case basis.

Although Taewon and Cinema Service have publicly downplayed talk of friction, the recent developments mark the end of an exclusive partnership between the two companies which saw Cinema Service release the first two Rings episodes as well as Korean box-office hits produced by Taewon, including Marrying The Mafia, Bichunmoo and Nowhere To Hide.

Cinema Service, for its part, has announced it will concentrate more closely on local product, of which it now releases 15-20 titles per year.

With CJ Entertainment pencilling in Return Of The King for a December 19 release, Cinema Service intends to bring forward its highly-anticipated local blockbuster Silmi Island to a December slot.