Australia’s Village Roadshow Limited has agreed to sell its 50% stake in Golden Village, Singapore’s leading cinema chain, to Hong Kong’s Orange Sky Golden Harvest. The deal is worth $129 million.
Village Roadshow had previously agreed, in June, to sell the 50% stake to Singaporean mini-conglomerate MM2 Entertainment. But Orange Sky Golden Harvest (OSGH), which owns the other half of Golden Village, blocked the move in July.
The new transaction will see OSGH achieve full ownership of Golden Village. OSGH will also be able to use proceeds from the recently agreed sale of its Chinese cinemas to China’s Dadi.
In a filing to the Australian Stock Exchange, Village Roadshow said that it would sell the stake for US$129 million (A$165 million). It will achieve a net profit of US$117 million (A$150 million).
Golden Village was established in Singapore about 20 years ago as a joint venture between Village Roadshow and Golden Harvest, OSGH’s predecessor. It now operates 11 multiplexes across Singapore and had a net asset value of HK$143 million, according to OSGH regulatory filings. The same documents show that Golden Village earned net after-tax profits of US$15.4 million (HK$120 million) in 2016, essentially unchanged from 2015.
“OSGH believe[s] that the acquisition would enable OSGH to strengthen its existing film exhibition business positioning in Singapore together with its brand name, and would also enable OSGH to enjoy stronger purchasing power and achieve additional cost savings from the enlarged scale of its business in this region,” Orange Sky Golden Harvest said in its filing.
Contacted repeatedly over the past two months, OSGH has not responded to Variety’s multiple enquiries.
OSGH operates six cinemas with 23 screens in Hong Kong and holds a 36% minority stake in Taiwanese cinema chain Vie Show, which operates 13 complexes with a combined 127 screens. In July it completed the sale of its 76 cinemas in China, with a combined 531 screens, after seeing admissions and revenues drop.