Germany's VCL Film + Medien has begun a finance restructuring of its subsidiary Scanbox Entertainment after talks with Danish banks to increase credit facilities ended without results. As a consequence, VCL and Scanbox's board agreed to transfer all operational assets of Scanbox into a new 100% subsidiary.
An ad-hoc release by VCL announced that, "with the consent of the principal creditors, a court-appointed supervisor will secure the interests of the creditors and supervise the activities of the business", and forecast that the effects from this restructuring model will lead to "extraordinary expenses" in the Group results for the third quarter.
However, VCL stressed that these restructuring measures would have "no effect" on the ongoing negotiations regarding the merger with another company.
At the end of last month, VCL revealed that it had signed a Letter of Intent with a new partner for an equity transaction "which will allow both companies to profit faster from the booming, fast expanding DVD/video market". It was expected that the process of Due Diligence on both sides would take until mid-November before a contract could be signed.