Imax Says Still on Course for Hong Kong IPO, Despite Chinese Stock Market Storm

Rich Gelfond

Rich Gelfond, the boss of giant-screen exhibitor Imax, saw a 35 percent decline in his compensation for 2012. That brought his pay to $3.6 million. The decline was in contrast to the increased pay for the boss of largest U.S. exhibitor Regal.

The giant-screen exhibitor is not letting Shanghai market turmoil halt the listing of its China business unit.

Imax says it remains on course for the $300 million Hong Kong stock exchange IPO of its Imax China unit, despite a see-sawing Chinese stock market.

"The recent volatility in the mainland Chinese markets has not altered our plans, and we continue to work our way through the Hong Kong IPO process, including meetings with investors and analysts," said Imax CEO Richard Gelfond on a Thursday morning conference call after the release of his company's second-quarter results. "We will make timely decisions as appropriate, based on market and business conditions," he added.

Imax's China unit IPO is not a mainland listing, and Gelfond said the run-up and recent correction in the Shanghai equity markets was not as pronounced as in Hong Kong. At the same time, he added a "receptive" Hong Kong market was required to complete the IPO, and Gelfond would not predict when optimum market conditions would emerge. 

"We still have plans to do it (IPO) and we'll keep you posted," Gelfond told analysts.

The Shanghai Stock Exchange and Shenzehn Composite markets recently underwent a steep plunge and partial recovery in value. The Chinese government also temporarily suspended IPOs to help stabilize the market.

Gelfond told analysts the Toronto-based exhibitor will eventually participate in hearings before the Hong Kong stock exchange to secure formal approval of the planned listing.

The stock market listing of its Chinese subsidiary is part of an ongoing expansion of Imax's business throughout greater China.

That includes Imax planning to build a postproduction facility in China as it looks to digitally re-master more local language films. At the same time, Hollywood titles like Furious 7, Jurassic World and Avengers: Age of Ultron did big business for Imax in China in recent months.

"It (Hollywood movies) kind of wiped out the whole box office during that quarter. There wasn't a lot of time to show anything else," Gelfond told analysts about the company's second quarter. Local language titles are currently dominating multiplex screens in China during a blackout period for Hollywood films, which will run through late August.

Plans for the Hong Kong IPO follow the giant-screen exhibitor selling a 20 percent stake in its expanding China business for $80 million to CMC Capital Partners, a media- and entertainment-focused investment fund, and FountainVest Partners, a China-focused private equity firm. Any Hong Kong IPO will be accompanied by Imax continuing to expand its screen count in China and screening tentpole Hollywood movies and Chinese titles as it navigates local regulatory and market waters.