Village Roadshow resolves credit issue
Deal includes financing of four Warners pics from '08NEW YORK -- Village Roadshow Pictures has successfully restructured a film production credit arrangement that had affected a co-production and co-financing deal with Time Warner's Warner Bros.
The restructure, led by existing bank partners Rabobank International and JP Morgan Chase, includes a $900 million financing facility and the provision for an additional $350 million.
The new facility runs through late 2010, and the company has the option to tap into the additional $350 million.
The deal by a division of Village Roadshow Entertainment Group unit includes the permanent financing of the 2008 releases "Get Smart," "Nights in Rodanthe," "Yes Man" and "Gran Torino." TW had previously said that VRS' 50% share of the production costs for the four movies amounted to about $120 million.
VRS' upcoming joint releases with Warners, which the new facility also covers, include "Where The Wild Things Are," a live-action adaptation of the children's book set to open in October, and "Sherlock Holmes" on Christmas Day.
The company was forced to restructure the facility when an unnamed third party experienced difficulties last year.
In early 2006, VRS increased its film financing facility from $900 million to $1.14 billion with terms that then extended through January 2011.
VREG chairman Graham Burke and CEO Greg Basser lauded "the ongoing loyalty and commitment shown to us by our partners at Warner Bros. and Time Warner" and said its bank partners "steered complex negotiations to a successful conclusion in this unprecedented economic environment."
Warner Bros. president and COO Alan Horn said: "We are extremely pleased that Village Roadshow has achieved its financial goals," highlighting that the two have been partners for over 30 years. "We look forward to continuing our successful relationship and to many more years of making great movies together."
Basser said the company hasn't set 2010 and 2011 release plans yet. It is currently working on animated features "Guardians of Ga'Hoole" and "Happy Feet 2."
He also said the new financing arrangement isn't necessarily a sign that the credit markets have improved. "It's hard to say at this stage," Basser said. "If you have long-term relationships with banks like we do, they take the time to work with you." He said VRS's track record and Warner relationship also give banks added confidence in a tough environment.