Chinese Firm Invests $220.5 Million In U.s. Movies
Although producing movies sounds as far removed from construction and real estate development as the U.S. is from China, shareholders of Hong Kong-based Paul Y. Engineering Ltd. today (Tuesday) approved a deal to invest $220.5 million in a new motion picture production company with Hollywood's Legendary Entertainment aimed at producing blockbuster movies in Hong Kong and mainland China aimed at international audiences. "Diversification into some unremarkable business is totally useless. Profit margin would be low, risk high," Paul Y. Engineering Chairman James Chiu told the Associated Press. "We decided to seek an innovative growth avenue." While under the deal, Paul Y. Engineering would hold a controlling interest in the new company, called Legendary East Ltd., Deputy Chairman Tom Lau said that it has no plans to become involved in the productions. "We do not understand the business of motion pictures nor do we pretend that we can contribute" anything more than money," he told the A.P. Paul Y. Engineering will hold a 50-percent stake in the business; Legendary, 40 percent; and Beijing-based Huayi Brothers Media Corp., 10 percent. With 60 percent of the company Chinese owned, movies that it produces will skirt China's tough restrictions on foreign movies that allow only 20 non-Chinese movies to be shown on the mainland each year. Legendary, whose movies include The Dark Knight, Inception , and the two Hangover films, has announced that the first film to be produced by the new company will be The Great Wall , to be produced and directed by Edward Zwick ( Blood Diamond, The Last Samurai ).