LOS ANGELES, CALIFORNIA, June 28, 2012 – Village Roadshow Entertainment Group (VREG) today closed a US$380 million recapitalization that will include the injection of US$275 million in new capital as part of a six-year mezzanine and equity arrangement with Trinity Opportunities Limited (Trinity) arranged by the Company in conjunction with Hong Kong-based Shikumen Capital Management (HK) Limited (SCM).
The new capital will be used to strengthen VREG’s balance sheet, increase the number of co-financed and co-produced films by Village Roadshow Pictures (VRP) and support the continued growth of the Village Roadshow Entertainment Group Asia (VREG Asia) film business in China.
“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. “This transaction could not have been possible without the ongoing loyalty and commitment of our partners at Warner Bros.”
“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.”
Over the past 15 years, Village Roadshow Pictures has built a library of 72 films that have grossed more than $11 billion in worldwide box office. The archive is one of the deepest and most successful independent portfolios of major releases and includes “The Matrix” Trilogy, the “Ocean’s Eleven” Trilogy, “Happy Feet,” “I Am Legend” and the “Sherlock Holmes” franchise.
Through its long-standing partnership with Warner Bros., VRP will continue to co-finance and co-produce high-caliber, star-driven films, such as upcoming releases “Gangster Squad,” starring Ryan Gosling, Josh Brolin, Emma Stone and Sean Penn (U.S. release on September 7, 2012) and “The Great Gatsby,” under the direction of Baz Luhrmann and starring Leonardo DiCaprio, Carey Mulligan and Tobey Maguire (U.S. release on Christmas Day 2012).
“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.
VREG Asia, through its banner Village Roadshow Pictures Asia (VRPA), intends to mirror its U.S.-based business model built on strong portfolio films and has launched its production business with an initial slate of three projects, with plans to ramp up to five to eight titles per year.
The first release for VRPA, 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 VRPA are co-financing and will co-distribute together with China Film Group and Wanda Media.
“My Lucky Star,” produced by and starring Chinese superstar Zhang Ziyi, is a prequel to the Zhang hit, “Sophie’s Revenge.” The project is currently in pre-production and expected to commence principal photography later this year.
“Over the years, VREG has established itself as a global leader in the production and financing of high-quality filmed entertainment content,” said Jeffrey Lau, Managing Partner, Trinity and Co-Founder and Managing Director, SCM. “VREG’s feature film library is easily one of the best and largest in the industry. We are delighted to partner with VREG to expand its core film business and support its initiatives in fast-growing international markets like China.”
Village Roadshow Limited has agreed to recapitalize its existing US$106 million of preference shares and, with resulting new equity, is the largest shareholder with 47.6 percent. Crescent Entertainment, Falcon Investment Advisors and Tailwind Capital also remain shareholders.
The $1 billion film financing facility led by Rabobank International and JP Morgan Chase remains in place.