Kevin Spacey's Bobby Darin biopic Beyond The Sea has become the first film production to benefit from the State of Brandenburg's guarantee scheme.

With the state-backed guarantee as a security, Studio Babelsberg Motion Pictures (SBMP) will put up Euros 4.8m towards the film's $ 20m-plus production costs through a loan from HypoVereinsbank. "The recoupment position for SBMP and Brandenburg is as good as that for the other equity partners", noted Thierry Potok, SBMP managing director, who expects the production to create an economic "effect" of 400% in the region.

"Without the state guarantee Kevin Spacey would have been in England with his project", added Henning Molfenter, SBMP's Head of Production. "It is particularly in the independent sphere that this form of financing is very important as a way of bringing projects to Babelsberg. For we are competing with all of the studios worldwide and, apart from the suitable locations and production possibilities, an additional source of financing alongside the classic film subsidies will become more and more important, especially in view of the EU enlargement."

"Beyond The Sea is exactly the right project to start with because a lot of turnover can be generated at the studio", Molfenter added. "The cast is just right and the project has great prospects on the international market and at festivals. It is a film which will be a great advertisement for Babelsberg."

Molfenter pointed out that the guarantee scheme was not restricted only to international productions - CMW Films' Minotaur may become the second project to benefit from the initiative - but would also be open to local German productions. "However, it would make less sense if the productions are planning to spend less than Euros 1m at the studios", Potok said.

Meanwhile, he confirmed that "initial talks" have begun with NDR director-general Jobst Plog about the possibility of Studio Hamburg's Adlershof-based production complex Studio Berlin merging with Studio Babelsberg under the mantle of the Studio Hamburg Group once Vivendi has exited from Babelsberg.

"We are pleased about the interest in our company. Studio Babelsberg has evidently transformed into a lucrative takeover candidate in the past years and become an integral part of the German studio landscape," Potok said

Erhard Thomas, spokesman for the State of Brandenburg, stressed that the talks were "still at the exploratory phase to see where it makes sense from the standpoint of regional policy as far as the studio landscape in Berlin Brandenburg is concerned. Nothing has been decided yet."

Potok added that the option of a management buyout for the studios was still being pursued in spite of the talks with Studio Hamburg: "it could be an MBO or a combination of this with Studio Hamburg. We shall have to see." However, he warned against Plog's proposal to concentrate on television production, pointing out that "the Federal Republic has an over-capacity in television studios and inadequate provision of film studios. It is especially this, the know-how and the reputation in Germany, Europe and the world in the field of film production, that distinguishes Studio Babelsberg from all of the others."