DreamWorks could get $825 million film financing
LOS ANGELES (Reuters) - Director Steven Spielberg's DreamWorks Studios could receive $825 million in film financing to begin producing movies starting this year, an Indian company involved in deal talks said on Wednesday.
Reliance ADA Group, the Indian conglomerate, is in talks with DreamWorks Studios partners Stacey Snider and Spielberg in New York, and the $825 million figure has emerged from those talks as a possible funding slate for DreamWorks Studios.
The deal between the two companies, which announced a plan to work together last year, has not been finalized.
But the ongoing negotiations over financing come after DreamWorks Studios said in February that the Walt Disney Co would distribute its films.
Under the terms of the deal, which could allow DreamWorks to make five to six films a year, Reliance would match whatever financing DreamWorks can get from a syndication of banks.
The $825 million funding slate announced by Reliance would break down as $325 million from the Indian conglomerate, $325 million from the banks and $175 million from Disney.
But the total amount could change if DreamWorks raises more from banks. That would increase the matching equity investment from Reliance, which has agreed to provide up to $550 million.
The deal between Reliance and DreamWorks was initially valued at $1.2 billion, but Amit Khanna, chairman of Reliance Big Entertainment, a division of Reliance ADA Group, said that much money is not needed now.
"If so required, we will raise the money at a later stage through a balance of debt and equity," Khanna told Reuters.
With the downturn in the global economy, DreamWorks had trouble securing financing from banks in recent months.
"This venture with Reliance opens a new door to our future," Spielberg said in a statement.
"Their visionary step has given us a new set of dreams to work toward," he said.
The newly created DreamWorks Studios is a production unit separate from listed DreamWorks Animation SKG Inc.
Under the deal, Disney would market and distribute the studio's films around the world, except in India where Reliance would retain distribution rights, Reliance said.
No date was given for when Reliance and DreamWorks Studios expect to close their deal.
DreamWorks has looked for funding since last year, after cutting ties with Viacom Inc's Paramount Pictures.
- NOAA employee charged with stealing U.S. dam information
- Sweden gets two new sightings, as hunt for undersea intruder goes on
- Special Report: Traffickers use abductions, prison ships to feed Asian slave trade
- Hong Kong protesters plan march after fruitless talks with government
- Three Denver girls reportedly en route to Turkey detained, sent home