eSun, which already owns 37.33% of the company, is offering to acquire all outstanding shares to make Media Asia its wholly owned subsidiary. The company says the takeover would be a good move because of 'thin trading volume and volatile financial performance' as well as 'high administrative and compliance expenses required to maintain a separate listing' since Media Asia's initial public offering on the Singapore stock exchange in November 2004.
'As most of our projects are now of big budgets, such as Confession Of Pain, which require a long production time of at least two years, the return period on investment has become longer which makes it difficult to anticipate revenues and earnings,' says Media Asia CEO John Chong. 'We are better off in private hands which will remove investors' pressure to perform and allow us to be more flexible in making business decisions.'
He adds that Media Asia aims to make about eight productions this year, including Peter Chan's The Warlords and Feng Xiaogang's The Assembly - both are targeted for release this December - as well as Law Wing Cheong's local comedy Hooked On You which is due out this summer.
After the takeover, eSun also expects greater synergies between Media Asia and its other entertainment units including Macau Studio City. Located on Cotai Strip, the mega-entertainment complex will comprise facilities for a casino, hotel, theatre, film studio and retail stores. Construction started in January with the first phase scheduled for completion in early 2009.
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