The ambitious plan to build a third major film studio in Australia - with the backing of US giant Viacom - is floundering because of a complete lack of interest from institutional investors.
The public float has now been abandoned and the retail precinct shaved off the development to bring the cost down from the original $316m (A$500m) estimate.
The partners in the Studio City consortium are believed to be tipping in $63.2m (A$100m), including $22.1m (A$35m) from Viacom, but have to meet the Docklands Authority's March 31 deadline to raise the rest. They now hope to privately fund the studios and the first Paramount-branded theme park outside North America and there is also talk of the State Government stepping in to assist.
The studio was to be contained within a theme park and retail precinct, which was just one part of Melbourne's 220-hectare $3.8bn (A$6bn) Docklands site.
"The response and public support from the community has been incredible," said Viacom Australia managing director Paul Hameister. "However, disappointing market conditions have caused us to suspend the float. We will be reviewing a new structure to enable the project to proceed."
Various reasons are touted for the lack of interest from the financial community including interest rates, industrial relations and the state's political instability following last year's change of government.