Luc Besson's EuropaCorp in Bailout Talks With Pathé
Jerome Seydoux's French studio would take a majority stake in a debt-for-equity swap.
Luc Besson's EuropaCorp is in discussions with Pathé, the French studio behind In the Fade, to take a majority stake and give a much needed cash infusion in his struggling company as it looks to restructure its debt.
“The group Pathé has expressed interest in a potential stake acquisition in the capital of the company. This expression of interest, non-binding, is subject to the realization of several conditions precedent, in particular an agreement on the restructuring of the existing debts of the group,” the company said Wednesday in a statement after news leaked to French newspapers earlier in the day.
While EuropaCorp confirmed the negotiations, it added that it “cannot assure that this proposal will come to a successful conclusion, nor give any precision on the schedule or structuring of the potential transaction resulting from the current discussions.”
The company is looking at a debt-for-equity swap with Pathé. It added that several conditions are not met — including approval of the company's leadership. EuropaCorp said it is also in negotiations with other potential buyers.
Besson and his holding company FrontLine still own 38 percent of the company, while Chinese investors, which put $67 million into the company in 2016, hold 28 percent.
EuropaCorp sold off its theater chain to Pathé in 2016, and the two signed a distribution partnership in December. The upcoming Anna, starring Helen Mirren and Cillian Murphy, is now in Pathé's hands for distribution in France. The film is set to be released June 21 by Lionsgate in North America. The company finally set a release date after a rape charge against Besson was dismissed.
EuropaCorp has been seeking a savior since Besson's sci-fi epic Valerian and the City of a Thousand Planets bombed at the global box office. His Chinese backers Fundamental Films have backed off after being burned by their investment, and other potential partners, including Tarak ben Ammar, have seemed to have cooled on the company. It went into a six-month bankruptcy protection period on May 13.
Besson's company has reduced its slate and is now looking at five films per year, half of the previous total. However, after Anna, it has no films in production.
The company's stock received a boost from the news, up 78 percent in Wednesday trading, but still closing at $1.23, down from the $5.90 when Fundamental bought in three years ago.