Xinke Materials has "jumped" again, giving up the acquisition of Tianma Film and Television after Hollywood production company

Xinke Materials announced on the evening of March 28 that the company had previously planned to acquire a 29.9% stake in Tianma Film and Television. However, this is not the first time Xinke Materials has "jumped the ticket".

Xinke Materials announced on the evening of March 28 that the company had previously planned to acquire a 29.9% stake in Tianma Film and Television, but as of now, the company has failed to complete all prerequisites for the acquisition and delivery, which is 11 days overdue from the agreed deadline. After consultation, the company and the counterparty agreed to terminate the sale and purchase agreement, and neither party will have to bear any subsequent legal and financial responsibilities.

However, this is not the first time Xinke Materials has "skipped a ticket". On December 6, 2016, Xinke Materials, which had been suspended for more than four months, issued an announcement in succession, disclosing a number of major measures of the company and announcing the termination of the acquisition of 80% of the capital interest of Hollywood production company Midnight Investments L.P. The reason for terminating the acquisition was that the other party had not provided the materials needed to respond to the Shanghai Stock Exchange's "Inquiry Letter", resulting in the postponement of the reply to the inquiry letter three consecutive times, and it was impossible to determine when the reply would be completed.

It is reported that in this transaction, Xinke Materials acquired 80% of the capital contribution interest of Midnight Investments L.P. for 2.388 billion yuan in cash, at a premium of 627.89%. The acquisition funds came from the company's own funds and financing from third-party financial institutions. The plan has repeatedly mentioned that the company's asset film library includes more than 200 homemade, co-produced and agent sales films. It has rich IP resources and leads the production of "Dallas Buyers Club" and "Nowhere to Escape"."Dallas Buyers Club" won Oscars and Golden Globe and other awards. When Xinke Materials responded to the reasons for terminating the transaction, it said,"It is mainly caused by the other party's poor cooperation. There is no time plan for when to provide the information (needed to respond to inquiries), but the company cannot wait forever, resulting in significant uncertainty in the reorganization." As an alternative plan to the company's "dual main business development of copper processing and film and television culture" strategy, Tianma Film and Television has become the "back-blame" of Xinke Materials this time.

According to the announcement, Xinke Materials plans to invest approximately HK$194 million to acquire 776 million shares of Tianma Film and Television held by Rongen Company, accounting for 29.9% of its total share capital, and the purchase price is HK$0.25 per share. After the acquisition is completed, Rong En Company's equity in Tianma Film and Television will be changed to approximately 16.33%. The total equity held by famous Hong Kong filmmaker Huang Baiming will account for approximately 19.49% of the total share capital and will no longer be its controlling shareholder. Xinke Materials said that the main reason for the acquisition of Tianma Film and Television is to have a strong synergy effect between Hong Kong film and television business and the mainland company's own film and television business in the future, to form a "1+1>2" effect and achieve an effective allocation of resources.

Regarding the practice of terminating the acquisition of Hollywood Film and Television Company and immediately acquiring a 29.9% stake in Tianma Film and Television, a Hong Kong-listed company, Ma Jingzhong, chairman of Xinke Materials, once told the media that the company adheres to its strategic goal of transforming into the film and television cultural industry and that this reorganization is independent. The acquisition of Tianma Film and Television is in line with the company's long-term development goals. For media reporters,"Is this acquisition a financial investment or an intentional cooperation?" Chairman Ma Jingzhong replied that the acquisition of Tianma Film and Television was to consider the intention of jointly developing and cooperating together in the future.

According to the film list released by Tianma Film and Television recently, the company invested hundreds of millions of dollars in the preparation and filming of "Ip Man 4","Zhang Tianzhi","Kowloon Undefeated" and many other films in 2017 to create a Kung Fu Action Year. Xinke Materials, which abandons Tianma Film and Television, may lose its best partner to boost performance.

Editor: vian