SHANGHAI –- U.S. film giant Warner Brothers is preparing to invest in Shanghai's Paradise Cinema, the first foreign film company to do so, state press reported Wednesday, said AFP.

Warner Bros will hold a 49 percent stake in the joint venture with the remaining shares going to Paradise Film City Company, the Shanghai Daily reported, citing unnamed officials.

The year-old Paradise Cinema, located in Shanghai's downtown Xujiahui district, will be renamed "ParaWarn Cinema", the report said.

Box office collections at Paradise ranked second in Shanghai, after Studio City, the city's leading movie theater. If all goes well, a deal will be announced on July 12 at the premier of ***The Matrix Reloaded*** -- Warner Brothers' latest blockbuster. The premiere was scheduled for May 29 in Shanghai two weeks after its worldwide release in the U.S. but the outbreak of Severe Acute Respiratory Syndrome delayed the plans. The report did not say how much the deal is worth.