Just A Minute With: Amit Khanna on Reliance-DreamWorks deal

MUMBAI (Reuters) - Reliance ADA Group and DreamWorks Studios are closing in on a deal that could see director Steven Spielberg’s DreamWorks receive $825 million in film financing to begin producing movies starting this year.

A handout photo of Amit Khanna, chairman of Reliance Big Entertainment, a division of Reliance ADA Group, July 16, 2009. REUTERS/Handout

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, told Reuters that much money is not needed now.

Q: How much has Reliance invested in this deal?

A: “Reliance Big Entertainment has made an equity investment of $325 million while Disney will put in $150 million. The remaining money will come in from a syndication of banks. DreamWorks plans to make around five to six films per year.”

Q: Wasn’t the deal valued at $1.2 billion when it was announced last year?

A: “That’s right, but right now we don’t need that kind of money. If required, we will raise more money through the same balance of debt and equity. Who knows, ultimately the deal may be worth even more than what was originally announced. $825 million is an initial investment. I think the fact that we were able to close the deal in such a market, and that too on favourable terms, is a positive thing.

Q: What does this deal mean for the entertainment industry in India and for your company?

A: “We had announced this deal two years ago and this was the next logical step. We will bring a new perspective to the business. We have acquired some movie theatres in the U.S., we acquired a film restoration firm last year, and we have co-production agreements with several other companies, including with George Clooney and Julia Roberts’ production houses.”

Q: Can we see a Bollywood production from DreamWorks?

A: “I don’t think so. DreamWorks will concentrate on Hollywood. We have Big Pictures to handle the Bollywood side of things.”

Q: There was a lot of talk after Steven Spielberg’s break from Paramount Pictures.

A: “This in no way affects the deal he has with us. In fact, he was more comfortable with us. We are hopeful that this is the beginning of a fruitful partnership.”