CMC to take control of Huayi Brothers in $120M restructuring deal
What's the deal? China Media Capital (CMC)Dealroom has a profile for this one. Try Dealroom →, the media group founded by Li Ruigang, will acquire a 17% controlling stake in troubled Chinese film studio Huayi Brothers for about US$115M (roughly $120 million). The buyout comes through a court-supervised restructuring: CMC will take 896 million transferred shares at about US$0.13 each, making Li the actual controller of the company.
Why now? Huayi, listed as ST Huayi, has been on the brink of delisting. It has lost money every year since 2018, with cumulative losses topping US$1.17B, and creditors applied to restructure it in April.
The numbers: The rescue barely lifted sentiment. On September 17, ST Huayi shares closed at US$0.25, down 10.05%, leaving its market value at US$682.8M. Parties aim to complete the restructuring before December 31, 2026.
What's the endgame? Li, sometimes called "China's Murdoch," already controls Hong Kong's TVBDealroom has a profile for this one. Try Dealroom →, Shaw Brothers HoldingsDealroom has a profile for this one. Try Dealroom →, Daylight EntertainmentDealroom has a profile for this one. Try Dealroom →, and Caixin MediaDealroom has a profile for this one. Try Dealroom →. Earlier this year he folded his core film and television assets into Shaw Brothers; Huayi would widen that footprint further.
The backstory: Founded by brothers Wang Zhongjun and Wang Zhonglei, Huayi listed on the ChiNext in 2009 as the first A-share film and television company and produced hits including Aftershock and The Eight Hundred . Its decline began in 2018 after the industry's "Yin-Yang Contract" tax scandal.
What could go wrong? The deal depends on the restructuring plan being approved and implemented on schedule. CMC declined to comment on its plans, saying only that everything is "subject to the announcement."
The signal: A distressed studio passing to a well-capitalised media consolidator underscores how power in China's entertainment sector is concentrating around a handful of established players, with Li steadily assembling assets across film, television, and news.
Read more: eu.36kr.com
Image credit: greggman
