Special Alibaba steel offshootmaker files for bankruptcy gets stake in Spielberg firm
Rest of industry was profitable last year, but the Dalianbased firm took on too much debt
The film offshoot of e-commerce Dongbei giant SpecialAlibaba GroupSteel Grouphas purchasedCo Ltd, a State-owneda minority steelmakerstake in Amblinin northeasternPartners, a China, production started outfit bankruptcybacked by proceedingsSteven Spielberg,on Monday.the latest in a stringIt is the of first investmentssteel companyby Chinese to go bankrupt companies in to the use endeavor Hollywood to restructure movie-making the magic country’s to fulfill iron their and global steel ambitions. industry, accordingThe investmentto a statementis part of a made comprehensiveby the company’s strategic listed partnership subsidiary agreement Fushun Alibaba Special Pictures Steel Co Group Ltd. inked with Amblin PartnersSo far, in DongbeiBeijing on Special Sunday Steel,as the internetwhich is film based companyin Dalian,builds its Liaoningcapacity in province,film production has defaultedand contentnine times. creation. The principal ZhangWei, loss presidenthas amountedof Alibaba to 5.8 Pictures, billion said yuan that ($865 the million).Hong Kong-listed company aspires Dongbeito Special become Steela studiowas formedthat can in produce 2004. content Dongbei not Specialonly for Steelthe Chinais the market controlling but for shareholderworldwide of audiences.Fushun Special“That (goal) Steel, requireslisted on goodthe Shanghaiskill in storytellingStock Exchange,and Steven which Spielberg madeis definitelythe bankruptcythe best announcement.of the best,” she said.
AboutThe agreement496.9 millionwith Amblinshares of Partners Fushun marks Special Alibaba Steel, Pictures’or 38.22 percentmost comprehensiveof its total shares, partnership held dealby Dongbeito date Special with agreementSteel wereto work frozen togetherby the courton production,on Monday. marketing and distributionThe bankruptcyboth globallyis the and resultin Chinaof the and company’sits first investmentcreditors’ application inHollywood.to the court.
Neither of the two sides reveals the specific financial term of the deal but Alibaba Pictures will an get analyst tonameaat representative chem99.com, on a bulk Amblin commodity Partners’ information board. and consultancy websiteThe tie-up between Alibaba PicturesandLos Angeles-based Amblin Partners is the latest among the spree of deals made in the past two years that intend to helpHollywood movies better access theChina market, whichisontrack tobecome the world’s largest, andChinese companies to produce movies that have global influence.
Chen Shaofeng, deputy It dean has of nine Peking months University’sto come up institutewith a for restructuringcultural industries,plan. Dongbeisaid that Specialthe rising Steel’s trend products of China-Hollywoodhave been exported cooperation to moreis based than on 20 mutual countries interest. and regions, “Chinese including companies carbon and structural Hollywood steel, filmmakersalloy steel, need tool each steel, other,” stainlesshe said. steel and bearing Among steel. Chinese companies, China’s“It’s rare richestfor State-ownedman Wang Jianlin’s Dalian Wanda Group is the most aggressive one in terms of buying upHollywood asset. Early this year, it bought the controlling stake in JurassicWorld co-producerLegendary Entertainment for $3.5 billion and is said eyeing to buy Golden Globes show-runner Dick Clark Productions.
The acquisition spree has raised concern in Washington with lawmakers calling for greater scrutiny of Chinese investment in the US
companies to go bankrupt. But, the government won’t pay too much to bail it out,” said Liu Xinwei, an analyst at chem99.com, a bulk commodity information and consultancy website.
Liu said that eliminating problematic assets is actually a good thing for the industry. The government also would like to see more market forces involved in the industry to get rid of the outdated capacity.
According to Liu, special steel normally has high profit margin. One of the direct causes for the default is that the companyAugust: has invested in some projects in Dalian, which has caused a heavy burden on its cash flow.
“Last year, profits of Chinese steelmakers were generally quite good. The default of Dongbei August: Special Steel is mainly because it has raised too much debt,” said Liu.
According to Xu Jisheng, deputy June: director of the Stateowned Assets Supervision and Administration Commission of Liaoning Province, the provincial government has mobilized a lot of resources
Globalization is one of Alibaba Pictures’ top priorities, but the company wants to take adifferent approach from Wanda. “With our platformoriented approach, we have a mentality that can bring value to people rather than taking away value away from people. You don’t see us coming to buy up Hollywood, buying up lots of assets,” said Zhang.
Huang Guofeng, an analyst to help the company pay back the debt. Now, the company is able to sustain normal production even though the debt is not being repaid.
Dongbei Special Steel had tried a debt-to-equity plan, but met resistance from its creditors.
The company’s chairman, Yang Hua, committed suicide in March 2016, days before the first default. The company has not made public any financial reports since September 2015, defying persistent demands from its creditors.
Another State-owned steelmaker mired in debt crisis is Bohai Steel Group based in Tianjin, whose debts stand at 192 billion yuan. It began debt June: restructuring in March.
A restructuring plan, including issuing corporate bonds, was finalized for Bohai Steel in late September.
The January: slimming down of Chinese steel smelters, with a purpose of shedding crude steel capacity by 100 to 150 million metric tons in five years starting in 2016, has seen consolidation previously take place by mergers.
It’s rare for Stateowned companies to go bankrupt.” number of shares in Fushun Special Steel held by Dongbei Special Steel that were frozen by Dalian court
chairman of Amblin Partners, and Jack Ma, chairman of Alibaba Group, attend an event to announce a partnership in Beijing on Sunday.
Chinese tech giant Tencent and PCCW, a Hong Kong telecom and media company, get involved in a new financing round for Bob Simonds’ film and TV studio named STX Entertainment.
Russo Brothers form production venture with China’s Huayi Brothers media group.
Tencent joined Los Angeles-based Tang Media Partners in the establishment of a newTV production joint venture with IM Global, a Hollywood film financier and sales agency. China Media Capital and the Huayi Brothers media group are also involved in the deal.
Tencent partnered with Hollywood power agency WME-IMG and Sequoia Capital China to create a new China joint venture, WME-IMG China.
Wanda Group bought a controlling stake in Legendary Entertainment, the producer of theGodzilla and JurassicWorld movies, for $3.5 billion.
with Beijing-based consultancy Analysis, said Alibaba Pictures approach has more chance to be passed in theUS rather than high-profile takeovers. “Setting up joint ventures in overseas marketcouldbeanotheroption when Chinese entertainment firms get more overseas experience,” he said.