China IPO Sends Imax Shares Towards New All-Time High

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The giant-screen exhibitor, led by CEO Richard Gelfond, in an SEC 8K filing said it may launch a fund to finance Chinese-language films.

Imax stock on Thursday neared a new all-time high as investors reacted to news of a planned Hong Kong IPO for a fast-expanding business in China.

Shares in Toronto-based Imax surged $3.03, or 8 percent, to $41.80 in pre-market trading, before settling back in morning trading to $38.77, up 20 cents on the day. Imax posted an all-time high for its shares at $42.50 in 1997 as a technology company.

But investors are now reacting to plans from Imax for an initial public offering and listing of its shares on the Hong Kong Stock Exchange. The giant-screen exhibitor in a heavily-redacted SEC 8K filing on Thursday said Imax China in 2014 posted a profit of $22.6 million on revenues of $78.2 million, well up from 2013 earnings of $17.4 million on revenues of $56 million.

"We plan to pursue potential screening opportunities for TV dramas, live shows, sports events and other alternative content in our theaters, as well as to explore the possibility of working with certain third parties to establish a fund to finance Chinese-language films," Imax added in the IPO propectus.

Imax also plans to launch a digital re-mastering facility and screening room in China to allow Chinese-language films to be converted into the Imax format. "This facility is expected to be fully operational by the end of 2015, and we believe that it will be highly attractive to filmmakers in the PRC (People's Republic of China) and strengthen our partnerships with them," Imax said.

Imax also cautioned in the 8K filing that it had not yet decided the "timing or terms of any listing or whether the proposed transaction will ultimately be approved by the Hong Kong Stock Exchange."

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