Australian Village Roadshow: US$275 million refinancing and expansion in China

30 June 2012 11 h 04 min Comments Off

Village Roadshow Entertainment Group (VREG) today announced it had obtained US$275 million of new funding, as part of a restructuring of its capital base.

Following the restructure, Village Roadshow Limited (VRL) will be the largest shareholder in VREG, with 47.6% of the ordinary shares of VREG together with interest bearing non-voting redeemable equity shares of US$100 million.

The new funding will be used to strengthen VREG’s balance sheet and significantly increase the number of co-financed and co-produced films by Village Roadshow Pictures (VRP). This will also support the continued growth of the Village Roadshow Entertainment Group Asia (VREG Asia) film business in China.

Executive Chairman of VRL, Mr Robert Kirby said “VREG’s new funding will allow it to boost its film production operations over the next few years, including continued growth in the important market of China, where VREG Asia’s first co-produced films are scheduled for release in 2013.”

VRL Chief Executive Officer, Mr Graham Burke said “This cements VREG’s position as one of the leading independent film production  companies and demonstrates the underlying strength of Village Roadshow Pictures. This transaction could not have been completed without the ongoing loyalty and commitment of our partners at Warner Bros.”

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

VREG’s new funding is a six year mezzanine debt and equity arrangement, provided by Trinity Opportunities Limited. The facility was arranged by VREG and Shikumen Capital Management (HK) Limited (SCM) based in Hong Kong.

In addition to the new funding, VREG has restructured its existing capital base. VREG’s ordinary shareholdings and corporate governance have been simplified, with VRL now holding 47.6% of VREG’s ordinary shares.

… / …

The existing Village Roadshow Pictures film finance facility of US$1 billion remains in place as does a debt facility utilised by the Concord Music division of VREG.

To date VRP has released 72 films grossing over US$11 billion in worldwide box office. The library includes “The Matrix trilogy”, the “Ocean’s Eleven” trilogy, “Happy Feet” and “Sherlock Holmes”.

Upcoming titles through its long standing partnership with Warner Bros. include “Gangster Squad” and “The Great Gatsby”, under the direction of Baz Lurhmann, and starring Leonardo Di Caprio, Carey Mulligan and Toby Maguire (see for trailers and media materials).

Asian film production

VREG Asia intends to mirror its U.S.- based business model built on a strong portfolio of films and has launched its production business with an initial slate of projects, with plans to ramp up to five to eight titles per year. The first release for VREG Asia, scheduled for February 2013, is “Journey to the West” helmed by Stephen Chow. The film is currently in post-production and is being co-produced with Stephen Chow’s Bingo Movie Development and Bill Kong’s Edko Films.

“Man of Tai Chi”, Keanu Reeves’ directorial debut, is also slated for release during 2013. Reeves also co-stars in the film which is currently in production in Beijing and Hong Kong. Universal and VREG Asia are co-financing and will co-distribute together with China Film Group and Wanda Media.

Source: Village Roadshow (29/06/2012)

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