Legendary East hit by investor worries

BEIJING Legendary Pictures' plans for Hollywood-China movie production venture Legendary East experienced a setback yesterday following a key investor, Hong Kong's Paul Y. Engineering Group (PYE), put its $220.5 million investment on hold due to shaky real estate markets. Deal was among the greatest of the raft of contracts between Hollywood shingles and Chinese gamers targeted at engaging in the flourishing Chinese market. PYE stated inside a statement that even though stock placing had received an optimistic response, it wasn't enough to accomplish the placing prior to the year-finish deadline and the organization made the decision to place the placing on hold. "However, we maintain that diversification by having an purchase of Legendary East is advantageous to PYE. We intend to sort out an enhanced structure with the aim of re-starting the transactions," PYE chairman James Chiu stated. PYE is openly exchanged around the Hong Kong stock exchange and tried to enhance the Legendary East funds by placing new company stock with private equity finance firm AID Partners, and thru UBS AG, with other institutional and professional traders. PYE stated it might repeat the process in 2012 with the partners to change the dwelling from the deal. Underneath the original proposal, PYE planned to consider a 50% stake in Legendary East. Thomas Tull's Legendary Entertainment could have been playing a 40% stake in Legendary East and China's Huayi Siblings might have the rest of the 10%. In June, Tull merged with Chinese-born Hong Kong media and finance entrepreneur Kelvin Wu to produce Legendary East. The aim have been to create a couple of large-budget movies annually beginning in 2013 which were targeted at global auds but additionally in a commercial sense viable in China. The films may be mainly in British and have styles according to Chinese history, mythology or culture. Wu, formerly of Orange Sky Golden Harvest Entertainment, can serve as Legendary East's Boss and it is a principal at private equity finance firm AID Partners, which joined right into a "subscription agreement" to take a position $35 million in PYE to become significant investor in the organization. PYE is better noted for its property management biz in Hong Kong's flourishing housing market as well as for engineering work which has assisted shape the city's ever-altering skyline. Among PYE's towers, the middle, that is Hong Kong's fifth highest skyscraper, was adopted like a location in "The Dark Dark night," which Legendary co-funded with Warner Bros. Legendary East ended up being to enable Tull to bypass Chinese government limitations that put a 20-pic limit on foreign films that may participate in the country's theaters, and permit him to enjoy the growing box office in the area. Chinese B.O. increased 64% to $1.5 billion this year and it is likely to grow 30% this year to $2 billion. Contact the range newsroom at news@variety.com