Village Roadshow's $380 Million Refinancing Fuels Production With Warners, Expansion in China

The Gangster Squad Sean Penn Josh Brolin - H 2012
Wilson Webb/Warner Bros.

The Gangster Squad Sean Penn Josh Brolin - H 2012

"Gangster Squad" and "The Great Gatsby" are coming this year under the Australian company’s deal with the studio. Keanu Reeves directorial debut is part of overseas expansion.

Village Roadshow Entertainment Group, with support from its longtime movie industry partner Warner Bros., on Thursday announced a $380 million recapitalization, which includes the injection of $275 million in new capital.

The money will be used to expand co-financing and co-production of its slate of movies produced under Village Roadshow’s long term arrangement with Warner Bros. and to fund its expansion into production of movies in China. Through Village Roadshow Entertainment Group Asia. 

Upcoming releases being jointly financed with Warner Bros. include Gangster Squad, starring Ryan Gosling, Josh Brolin, Emma Stone and Sean Penn (domestic release September 7) and  the highly anticipated remake of The Great Gatsby, directed by Baz Luhrmann and starring Leonardo DiCaprio, Carey Mulligan and Tobey Maguire (domestic release on Christmas Day).

In the past 15 years, Village Roadshow has built a library of 72 movies which in total have grossed more than $11 billion at the global box office. They include The Matrix trilogy, the Oceans Eleven trilogy and the two Sherlock Holmes movies starring Robert Downey Jr. as the detective. 

“This funding cements VREG's position as one of the leading independent film production companies and demonstrates the underlying strength of Village Roadshow Pictures,” said Graham Burke, Chairman, VREG and Chief Executive Officer, Village Roadshow Limited.

“Village Roadshow Pictures is a great production partner and, working together, our companies have released many popular and successful films,” said Barry Meyer, Chairman and Chief Executive Officer, Warner Bros. “We’re delighted to continue our longstanding, mutually beneficial relationship with them.”

The Australian company said that the new capital is part of a six year mezzanine and equity arrangement with Trinity Opportunities Limited, which was arranged in conjunction  with Shikumen Capital Management Ltd. Of Hong Kong.

Shikumen established in 2007 manages Shikumen Special Situations Fund (non-Japan Asia deal fund), BlackPine Private Equity Partners Fund (Greater China private equity), as well as other investments and accounts.

Village Roadshow Limited is recapitalizing its existing $106 million of preference shares and, with the new equity, is the largest shareholder with 47.6 percent. Crescent Entertainment, Falcon Investment Advisors and Tailwind Capital also continue as shareholders.

Village Roadshow already has a $1 billion film financing debt facility led by Rabobank International and JP Morgan Chase, which remains in place. 

“This recapitalization will underpin the financial strength of VREG and facilitate the strategic growth of our film production business both in the U.S. and China,” said Greg Basser, Chief Executive Officer, VREG.

The first release planned by Village Roadshow Asia is Journey to the West, directed by Stephen Chow. It is currently in post-production in Beijing and Hong Kong.  Chow’s Bingo Movie Development and Bill Kong’s Edko Films are co-producing.

Village Roadshow is also currently in production on Man of Tai Chi, which marks actor Keanu Reeve’s debut as a director. Reeves also co-stars in the movie which is being co-financed by Universal and will be co-distributed with China film Group and Wanda Media.

Currently in pre-production is My Lucky Star, produced by and starring Chinese star Zhang Ziyi. It is a prequel to the Zhang’s movie Sophie’s Revenge.

“We are delighted to partner with VREG to expand its core film business and support its initiatives in fast-growing international markets like China,” said Jeffrey Lau, Managing Partner, Trinity and Co-Founder and Managing Director, SCM.