AFK Sistema, the largest diversified public financial corporation in Russia, is planning to establish the Europe’s largest film studio on the base of Lenfilm, one of Russia’s oldest and largest film studios, based in St.Petersburg.

The project is expected to be go forward as a public-private partnership that will involve a complete reconstruction of “Lenfilm” studio with the goal of attraction of domestic andforeign filmmakers. AFK Sistema expects to get a controlling stake in the studio and guarantees of the return of its investment, however the final decision will depend on the Russian government.

Vladimir Yevtushenkov, head of AFK Sistema said: “We want to make the biggest studio in Europe, where we can attract foreigners filmmakers from Romania, Bulgaria, Hungary, etc. This will not be a new business center, but a production studio.”

The volume of investments at the initial stage of the project is estimated at $10-15m, while total amount may reach $100m. Before the economic crisis, Lenfilm was valued at nearly $80m, however since that time these figures fell up to $50-60m.

Prospects of the project remains a mystery. Some Russian analysts have already expressed their doubts over the ability of Lenfilm to become the Europe’s largest film studio, taking into account the fact that the number of films produced in Russia every year remains low, compared even with the European countries.

AFK Sistema currently owns Russian World Studios (RWS), one of the largest film and television production companies in Russia, with one of Russia’s largest studio space.

In this regard, some of Russian analysts believe that AFKSistema may consider the possibility of merger of Lenfilm with Moscow and St. Petersburg studios of RWS.

Successful implementation of the project will make St. Petersburg one of the European centers of film production and strengthen the positions of AFK Sistema as one of the biggest holders of media assets in the Old World.