Hong Kong-based engineering and property firm Paul Y. Engineering is getting into the movie business, announcing a US$220.5 million investment in Legendary East, a film joint venture set up by Hollywood's Legendary Pictures and Beijing's Huayi Brothers. 'We believe this arrangement will work fine, with PYE providing the money and Legendary Pictures and Huayi providing their moviemaking expertise,' said Tom Lau, PYE's deputy chairman. The Hong Kong-listed construction company will hold 50 per cent of the joint venture, while Legendary Pictures, based in California, will take 40.1 per cent and the Huayi Brothers will own the rest. PYE said it would rely on its two partners for the moviemaking and would not interfere in production. 'Legendary Pictures together with Huayi will completely control the development committee,' Lau said. PYE said Legendary and Huayi were contributing intellectual property, 'their know-how, their network and their execution skill'. The joint venture, unveiled in June, will initially produce and distribute one to two big-budget films every year. 'We can invest a lot, that is very important,' said chairman James Chiu. Lau was optimistic on the returns from the business. 'Look at the track record of Legendary Pictures, their average cash-on-cash return is 1.8 times,' he said. The stories will be based on Chinese history and mythology, but be told in English. The projects will fit into the category of Chinese co-productions on the mainland and will not need to compete in the 20-film quota Beijing imposes on imported films. Legendary East movies will be distributed worldwide. In China and some other Asian regions, they will be distributed by Huayi Brothers, with Warner Bros handling other territories globally. The shareholders approved the plan unanimously yesterday, PYE said. PYE's stake in Legendary East will be funded by issuing 3.1 billion shares plus 500 million shares in case of over-subscription at HK$0.65 apiece, raising up to HK$2.3 billion. Chiu said the current volatility of the market did not worry him and he was confident about the future of the film industry. 'If the company's business is profitable, if it has a promising future, that is the important thing for investors,' he said. Legendary Pictures produced the global hit Inception.