EPT, APEX plan China cinemas

U.S. firm to invest half of $50 mil needed for venture

BANGKOK -- A new company founded by a team of executives from Warner Bros.' defunct China cinema unit and backed by U.S.-based Entertainment Properties Trust plans to invest $50 million with a joint venture partner to build multiplex cinemas in China.

The deal, set to be unveiled Tuesday in Macau, would see EPT president and CEO David Brain put $25 million from his Nasdaq-listed firm into play behind APEX International Cinemas, a Hong Kong-registered company founded this year and led by T.J. Green, the former GM of Warner Bros. International Cinemas China.

"After Entertainment Properties Trust continued success with cinema property investments in North America, it was only natural for us to next look at China being the fastest growing and most underserved cinema market in the world," Brain said in a statement released ahead of CineAsia, the Nielsen Co.'s annual three-day trade show at which Brain will speak.

The deal has APEX, which has offices in Beijing, and EPT -- owner of 80 North American megplexes -- planning luxury movie theaters in China's major cities "in conjunction with their joint venture with the largest entertainment company in China," the companies said.

"EPT expects to provide capital contributions of $25 million to APEX in tandem with the joint venture partner with the goal of building an initial 10 multiplex cinemas," APEX said. "The cooperation agreement signed today in Macau will further allow for cinema development well beyond this initial set."

Green in an e-mail declined to identify APEX's joint venture partner, citing a confidentiality agreement. The partner also would invest $25 million, he said.

In November 2006, WBIC abandoned its cinema plans in China after Beijing restricted foreign companies from majority ownership. Its cinemas were bought out by the state-run China Film Group in Beijing, tipped by insiders as the likely partner in the new deal, and by Beijing and Dalian-based Wanda Cinemas.

APEX was established this year by co-founder and president Johnny Liu, who comes from a background in marketing Hollywood blockbusters in China. VP Grace Ge was former director of China operations at WBIC, where she oversaw the opening of 10 multiplexes that, at one point, generated more than 10% of China's boxoffice returns.

APEX and EPT said their China cinemas would boast wall-to-wall screens, improved sightlines, outstanding sound and projection systems, modern decor and "unparalleled customer service."

APEX said it soon would announce cinema openings in Beijing, Shanghai, Guangzhou, and Shenzhen, as well as in other cities across China.
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