Chinese Star Vicki Zhao Buys Stake in Alibaba Pictures
The deal comes days after Alibaba Pictures warned of possible losses of $77 million for fiscal year 2014.
Chinese actor-director Vicki Zhao and her husband have bought a $400 million stake in Alibaba Pictures, the film and TV unit of the e-commerce giant Alibaba, as the group warned of significant losses because of production delays and falling advertising revenues.
According to a stock exchange filing, Gold Ocean Media, a company controlled by Zhao’s husband, Huang Youlong, bought a 9.2 percent stake in film conpany last month, making them the biggest shareholders in the company behind Alibaba.
Gold Ocean Media bought 1.93 billion shares of Alibaba Pictures at an average price of 21 cents (HK$1.60) each for a total of $398 million (HK$3.09 billion).
Alibaba's founder and executive chairman Jack Ma has made no secret of his ambitions to expand into the film business and has described his firm as "the world's biggest entertainment company."
Alibaba bought a 60 percent stake in Alibaba Pictures, then known as ChinaVision, for $780 million back in March, ahead of Alibaba's mammoth IPO, which helped raise money for the group's efforts to boost its media business.
Zhao's debut as a director, So Young, was one of the box-office triumphs of 2013 in China. She is best known overseas for her roles in Shaolin Soccer and John Woo's Red Cliff.
Earlier this week, Alibaba Pictures said it could incur losses of up to $77.41 million for fiscal year 2014 because of delays in distribution of some TV shows, falling magazine ad revenues, delays in production and asset-impairment provisions.
And earlier this month, Alibaba said top Hong Kong director Wong Kar-wai will produce Alibaba Pictures' debut movie. The movie will be written and directed by Zhang Jiajia, who is hugely popular with young readers, and will feature actor Tony Leung.
In August, the company said the new management had discovered possible financial breaches dating back to before the purchase.
Gold Ocean Media is a company involved in many areas, including hotel management, property, investment, autos and tourism. Local media reported that Zhao has a friendly relationship with Ma — her Weibo social media page shows her painting with the tycoon — while her movie Green Tea was produced by Dong Ping, the former head of ChinaVision.
First-half revenue fell 76 percent because of delays relating to a number of film and TV projects.
In December, Alibaba Pictures posted a $57.2 million loss in the first six months of the year but said that an investigation by auditors into its accounts had not revealed any irregularities.