Entertainment group Galleon's new Hong Kong acquisition, Phoenix, has clinched a potentially lucrative deal with TV3, Malaysia's largest TV station.

Under the agreement, Phoenix Investment Global, which loss-making Galleon bought for up to £2 million last month, is to supply its multi-platform interactive system to TV3. Phoenix is understood to be in line for an up-front fee worth several hundred thousand pounds with much more coming in management fees over the life of the contract.

AIM-quoted Galleon owns and develops intellectual property in children's and general entertainment and hopes the Malaysian deal will prove the first among many in the region. It is particularly keen on exploiting the potential of the massive Chinese market. Chief executive officer Phillip Green proclaims 'our strategy is aggressively to grow our Asian footprint and then maximise the value of the pipeline this creates by providing interactive entertainment contact with strong revenue potential'.

Chaired by entrepreneur David Wong, Galleon, whose eventual payment for Phoenix could reach £5.45 million depending on financial performance, has been growing fast, though, as yet, profits have proven elusive. After losing £1.2 million last year on £1.3 million turnover, the company lost a reduced £399,000 in the first half of 2007 on turnover more than trebled to £2.4 million.

Galleon, whose shares surged from 5.38p in 2005 to 34.75p last month, accompanied the Phoenix takeover with an £8 million placing at 29p. Now 29.25p, up 2.25p this morning, the shares currently value the company at £28.5 million and, though not risk-free, have speculative potential.

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