Thailand's largest exhibitor Major Cineplex is set to expand into film production following the completion of a share swap between its subsidiary M Pictures and media and content provider Traffic Corner Holdings.

Through a new subsidiary, Traffic Corner now holds 99.99% in M Pictures, the distribution arm of Major Cineplex. Traffic Corner issued 240 million new shares and raised its capital to $11.3m (360m baht) from $3.8m (120m baht).

Major Cineplex, which now owns a 40.81% stake, has become the largest shareholder in Traffic Corner. Both companies are listed on the Stock Exchange of Thailand (SET).

Traffic Corner plans to produce three films this year with each film at between $630,000 and $1.3m (20m-30m baht), according to Traffic Corner founder Suraphong Triamchanchai who now returns as CEO after leaving the company for a couple of years.

Suraphong is now also the new CEO of M Pictures. Formerly known as Nontanund Entertainment, the company is a major distributor of mainstream imported films.

Major Cineplex chairman Vicha Poolvaraluck said the collaboration with Traffic Corner aimed to create an integrated business model similar to Hollywood studios that consisted of production, exhibition and distribution.

With a foothold in new media, Traffic Corner will distribute the films in all non-cinema channels, including home videos, free-to-air and satellite TV, and digital media, as well as manage merchandising and marketing. These are mostly untapped areas for Major Cineplex and M Pictures.

The deal is also expected to benefit local independent productions, as Traffic Corner has plans to distribute local films produced by other companies.

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