EuropaCorp has confirmed media reports that historic French film group Pathé is in talks to acquire a majority stake in Luc Besson’s ailing film company.
“Pathé has expressed interest in a potential stake acquisition in the capital of the company,” EuropaCorp said in a statement, responding to a report by French financial daily newspaper Les Echos on Wednesday (May 29).
It said the non-binding “expression of interest” by Pathé was subject to several conditions, in particular an agreement on the restructuring of EuropaCorp’s existing debts, which stood at around $262m (€236m) at the end of last year.
“To date, as several essential conditions are not met – in particular the consent from the senior and junior lenders – the company cannot assure that this proposal will come to a successful conclusion, nor give any precision on the schedule or structuring of the potential transaction resulting from the current discussions,” read the EuropaCorp statement.
Besson’s once mighty Paris-based film studio – spanning production, distribution, international sales and exhibition at its height – has been reduced to a skeleton structure over the past two years as it battles to rein in debts accumulated from 2012 onwards.
At the beginning of May, the company suspended trading on the Paris bourse “ahead of an announcement” regarding the future of the company. A few days later that emerged EuropaCorp had been placed under court protection for six months to give it time to restructure its debts.
Over the last 18 months, EuropaCorp has sold its TV activities and catalogue to rising content group Mediawan; ceded the rights to some 300 films it acquired from Roissy Films in 2008 to Gaumont; and struck a three-year deal with Pathé to handle the distribution of current and upcoming productions including Anna and Little White Lies 2, which has drawn 2.3m spectators at the French box office since its release on May 1.
In Cannes the company, which used to occupy a suite in the Majestic Hotel, attended with a reduced international sales team that held two market screenings for Little White Lies 2.
“As announced on May 13 2019, the company will inform the market, in due time, of the outcome of the negotiations it intends to continue with the lenders and other potential investors,” Wednesday’s communiqué concluded.
It also noted that debt amounts mentioned in the Les Echos report dated back to figures announced in EuropaCorp’s 2017-2018 financial statements published on July 26, 2018, and did not take into account the repayments made during the 2018-2019 fiscal year.
Consolidated annual results for the 2018-19 financial year are due to be published on June 27 after the close of the stock market in Paris. Last week, the company published consolidated annual revenue figures for the 2018-2019 financial year. It reported revenues of $165m (€148.7m), which represented a 33% drop year-on-year. The company said this was due to the fact that the 2017-18 figures had been boosted by the presence of Valerian And The City Of A Thousand Planets in the line-up. The financial report did not give an up-to-date figure of debt levels.
In the outlook statement for the consolidated revenue report, the company said its two key objectives remained reinforcing the company’s financial strength, and restructuring debts as well as reducing overheads.
Looking at the line-up for the first half of the 2019-2020 financial year, it noted the French release of Little White Lies 2 on May 1 and the release of Anna on June 21 in the US and July 10 in France.
No other feature projects were listed as being in the works, although the company said it was pushing on with the development of a TV series inspired by the graphic novel The Extraordinary Adventures Of Adele Blanc Sec, which Besson previously brought to the big screen in a feature-length version in 2010.