- Associated Press - Monday, August 22, 2011

HONG KONG — Hollywood production house Legendary Entertainment and a Chinese studio have raised $220.5 million for their joint venture aimed at China’s increasingly lucrative film market.

Legendary and Huayi Brothers Media Corp. said in a statement late Sunday that they are selling a 50 percent stake in the venture, Legendary East, to Hong Kong construction company Paul Y. Engineering.

Legendary Entertainment has produced hits including “The Dark Knight,” “Inception” and the two “Hangover” movies.

The Hong Kong-based joint venture, which was announced in June, plans to make one or two “major, event-style films” a year for worldwide audiences starting in 2013.

The partnership allows Legendary Entertainment to bypass Chinese import restrictions that effectively limit the country to about 20 foreign blockbusters a year.

“With China’s rapid economic growth and rich cultural background, this is a filmmaking marketplace on the rise,” Legendary Entertainment Chairman Thomas Tull said a statement.

Beijing-based Huayi Brothers will distribute the movies inside China and Warner Bros. Pictures is expected to handle international distribution.

“We want to do globally appealing movies, so there will be a lot of elements involving East meets West,” said Kelvin Wu, chief executive of Legendary East.

Recent Huayi releases include the hit Feng Xiaogang disaster epic “Aftershock,” the kung fu drama “Shaolin” and the Tsui Hark fantasy epic “Detective Dee and the Mystery of the Phantom Flame.” Its films accounted for 17 percent of China’s box office in 2010, a year when Chinese box office takings surged 64 percent to $1.5 billion.

“There’s huge room for growth and we want to be ready to enjoy the bigger market when it’s there. We don’t want to come in when the market is mature,” Mr. Wu said.

Paul Y. will fund its purchase by selling new shares to a private equity firm and other big investors and it will own the largest stake. Legendary Entertainment and Legendary East’s management will own 40 percent while Huayi Brothers will own the remaining 10 percent.