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Alibaba Pictures Group, the film business arm of Chinese e-commerce giant Alibaba, has struck a strategic cooperation deal with leading film studio Huayi Bros. The deal includes a $103 million (RMB700 million) loan to Huayi.
The deal further expands the power and influence of deep-pocketed Internet platforms, such as Alibaba and Tencent, over the Chinese film industry. Alibaba and companies owned by founder Jack Ma have been significant minority shareholders in Huayi since 2014, and increased their positions again in 2015.
Deal - Huayi - Years - Studio - Films
The new deal with Huayi runs for five years and commits the studio to delivering 10 films in which Asian Union, a subsidiary of Alibaba Pictures, can be a co-investor and co-distributor. The two companies also agreed to work together on talent development, film marketing and merchandising through Alibaba’s Tao Piaopiao and Beacon platforms.
The five-year loan, provided at China’s five-year base rate, will be used by Huayi as working capital and for company operations. As security for the loan, Huayi is providing share pledges, rights to returns from a film fund, and “unlimited joint and several guarantees...
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