China Film Group's $740 Million IPO Suspended (Report)
China Film Group's and Shanghai Film Group's applications for stock offerings were suspended by regulator because of insufficient documents.
China Film Group's planned $740 million stock market listing has been delayed after the state-owned colossus failed to provide sufficient documents for an initial public offering, local media reported.
Shanghai Film Group's plans to raise $155.45 million from its listing have also been delayed because of insufficient documents, the Beijing Business News reported.
China's film market is the second biggest in the world and has grown rapidly, and the listing of China Film Group and Shanghai Film Group is read as a sign of concerted effort to build up an infrastructure for future growth and help the industry compete with Hollywood.
However, local commentators say that regulators are trying to cool the pace of initial public offerings, as the market is becoming overheated with companies trying to gain access to the film and TV industry via backdoor investments and mergers.
After years of stop-start negotiations, China Film Group, the country's largest film producer and distributor, last year announced its plans to go finally go public, but the Beijing Business News said the plan was delayed because of insufficient documents.
A prospectus issued in June 2014 said China Film Group was trying to raise $740 million.
China Film is a giant in the Chinese film industry. In addition to producing, importing, exporting and distributing films, it also operates theater chains, sells film equipment and manages talent.
The newspaper quoted Peng Kan, research and development director of the Legend Media consultancy, saying that China Film Group had an advantage over other film companies because it provided greater distribution and also enjoyed government allowances and a favorable tax policy.
China's biggest cinema chain, Wanda Cinema Line Co., raised $210 million in a Shenzhen stock exchange listing last month.
There are fears that regulators are trying to slow the pace of IPOs. Investors feared that IPOs had effectively been frozen before they resumed on the country's two bourses in early 2014 after a hiatus of 14 months, allowing around 50 already approved companies to list on the Shanghai and Shenzhen exchanges.