What's $120 million between friends?
Village Roadshow Pictures, which has owed that much to Warner Bros. for nearly a year on four films released in 2008, has repaid the studio after restructuring its $1.4-billion credit line.
Amid last year's financial collapse, the Australian film financing company unexpectedly lost access to funds it had committed to use for a 50% stake in "Get Smart," "Gran Torino," "Nights in Rodanthe" and "Yes Man." It has been co-financing Warner movies for over a decade.
The shortfall was disclosed by the studio's parent company, Time Warner, in a recent Securities and Exchange Commission filing in which it had to account for the films' costs.
Not surprisingly, given the current state of credit markets, Village Roadshow's credit line was reduced to $900 million, although the restructured agreement does have a provision for up to $350 million in extra borrowing. The financing will remain available until late 2010.
It took Village Roadshow about nine months to renegotiate its credit with lead banks Rabobank International and JPMorgan Chase.
In addition to claiming its stake in the four movies, all of which did well at the box office, the company is using the funds to co-finance late 2009 releases "Where the Wild Things Are" and "Sherlock Holmes."
"Naturally in the middle of the worst economic climate of my working life, it was very difficult and took longer than it had in the past," said Greg Basser, chief of Village Roadshow Entertainment Group.