Russia's VTB to Loan $47.5 Million to Lenfilm
The goverment provided guarantees, but "the studio will not be privatized," culture minister Vladimir Medinsky says.
MOSCOW – The Russian state-run bank VTB will extend a 1.5 billion ruble ($47.5 million) loan to the struggling film studio Lenfilm in a bid to bail it out of the dismal financial situation.
Russia’s president Vladimir Putin ordered that government guarantees for the loan should be provided, according to culture minister Vladimir Medinsky. “[The government guarantees] will allow the studio to speed up the process of collecting the cash,” he was quoted as saying by the Russian wire service RIA Novosti.
“The studio will not be privatized or converted to other uses,” he added.
The loan is to be provided for a 10-year period, while the interest rate is currently being negotiated.
St Petersburg-based Lenfilm, Russia’s oldest film studio, has been in a difficult financial situation for the last few years and its assets are in need of a major revamp. Lenfilm’s problems aggravated last week when the city’s utilities company demanded that the studio be announced insolvent as it failed to foot a 2 million ruble ($63,000) utility bill. Lenfilm also owes other creditors 76 million rubles ($2.4 million).
Last month, director/producer Fyodor Bondarchuk was appointed Lenfilm’s chairman of the board and is expected to help put the studio back on track.
The government’s pledge not to privatize Lenfilm ended a several-year long period of uncertainty, during which St Petersburg’s filmmaking community expressed concerns that the studio could lose its role as a platform for auteur and experimental cinema or, in the worst case, cease to exist at all.