UPDATE 1-Paramount Pictures scraps agreement with Huahua Media

(Reuters) – Viacom Inc’s (VIAB.O) Paramount Pictures said on Tuesday it has ended a financing agreement with China’s Huahua Media due to recent changes in Chinese foreign investment policies.

FILE PHOTO: A woman exits the Viacom Inc. headquarters in New York, U.S. on April 30, 2013. REUTERS/Lucas Jackson/File Photo

The agreement would have financed 25 percent of Paramount’s movies in fiscal 2017 through 2019, according to the studio.

In its draft guidelines for companies investing overseas, China said it would increase oversight in sensitive sectors including media organizations. (reut.rs/2zlXGwW)

Paramount said it had secured individual agreements with toymaker Hasbro Inc (HAS.O), Skydance Media and others to finance productions costs for the movies.

The termination of the deal would impact Viacom’s fourth quarter earnings by $59 million, the company said.

Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Shounak Dasgupta

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