Orange Sky Golden Harvest Entertainment Holdings Ltd., the parent company of Singapore movie chain Golden Village, is considering the sale of its cinema assets in Singapore and Taiwan. Its cinemas in Singapore represent the biggest component of its business, contributing to almost half of Orange Sky Golden Harvest’s revenue of HK$396 million in the first half of 2023.
According to sources who spoke to Bloomberg last Thursday (March 7), the Hong Kong-listed company is seeking a valuation of at least US$400 million for the assets. It is currently working with advisers on the potential divestment and has reached out to potential investors.
Other cinema operators and investment firms have shown initial interest, but considerations are still preliminary and Orange Sky Golden Harvest may still decide against a deal. The filmmaker may also consider the sale of it cinemas in Hong Kong, depending on investor response.
However, Orange Sky Golden Harvest has denied rumours of the sale. Whilst the company continuously evaluates various strategic opportunities that might benefit Orange Sky Golden Harvest, it said that there “are no current plans under consideration regarding the sale of businesses of the Group”.
This comes a few days before its regulatory filing, during which the company warned that it would return to losses when it reports its 2023 losses.
“Based on the information currently available and the board’s preliminary review and analysis of the unaudited consolidated management accounts of the Group, the Group is expected to record a net loss attributable to shareholders of not less than HK$90 million for the year ended December 31, 2023, as compared to a net loss of HK$46 million for the year ended December 31, 2022,” Orange Sky Golden Harvest said.
The movie studio offered little explanation for the worsening losses, which come despite improving box office activity, except to say that the 2022 figures were flattered by a HK$56 million gain from a property disposal.
Previously known as Golden Harvest, the business was co-founded by Hong Kong filmmakers Raymond Chow, Leonard Ho and Leung Fung in 1970. The company engages in film production, financing and distribution and remains famous for its film productions during the 1970s and 1980s, including Fist of Fury starring Bruce Lee and The Young Master starring Jackie Chan.
However, the company sold its library to satellite broadcaster Star TV in 1993, and has not been seriously or consistently been involved in production over the past decade.
As of June 30, 2023, Orange Sky Golden Harvest operates 15 cinemas with 119 screens Singapore. In Taiwan, it runs 17 cinemas with 182 screens, and in Hong Kong, the company manages 10 movie theaters with 37 screens.
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