Russian Studio Lenfilm Denies Reports About Poor Finances

Fyodor Bondarchuk

"These allegations are based on rumors and are groundless," a spokesman told The Hollywood Reporter.

MOSCOW -- Russia's oldest film studio, St Petersburg-based Lenfilm, has denied media reports about its allegedly poor financial state.

The local media recently quoted the studio's former employees as saying that Lenfilm had a huge debt burden and the release of a new portion of a $43.7 million (1.53 billion ruble) loan from state-controlled bank VTB was problematic.

"These allegations are based on rumors and are groundless," Valery Karpov, Lenfilm's spokesman, told The Hollywood Reporter. "True, the studio is still indebted, but over the last year, we have been able to decrease the size of the debt. We haven't received any subsidies, so we can only pay off the debt at a pace we can afford."

In late 2012, director and producer Fyodor Bondarchuk was appointed as chairman of the state-controlled studio, which had been struggling to stay afloat for the two preceding decades, with its facilities in urgent need of renovation. Prior to Bondarchuk's arrival, various privatization scenarios for Lenfilm were considered, but all of them were rejected as the local film community expressed fear that the studio’s lucrative property in the city’s center could be reconverted for other uses.

Securing the VTB loan in early 2013 was one of Bondarchuk's first achievements as the studio's new head, and Lenfilm said that the agreement is still valid.

"We received the loan's first portion and spent it on the repair of the roof," Karpov said. "Now the second portion has been approved with the culture ministry, and it is about to be released."