Spanish production house Lolafilms looks set to receive a much needed capital injection of Euros 21.6m by the end of March.
Telefonica media subsidiary Admira, 70% majority owner of Lola, has proposed a refinancing scheme to balance Lola's estimated losses of Euros 11m and carry out a capital amplification with the participation of some, if not all, of Lola's shareholders. The transaction will take place at a shareholders' meeting on March 22.
Lolafilms CEO Andres Vicente Gomez confirms that he will raise his share in Lola to 30% if other minority shareholders choose not to participate in the amplification. While local reports suggest that Gomez's role in Lola may be "diminished" following the transaction, Gomez says he will continue on as CEO.
Gomez says the move will permit Lola to "continue making movies" but is not an effort to "avoid bankruptcy" as at least one local news report suggested.
While sources at Admira suggest that Lola's ambitious English-language production activities have been a "ruinous" business, Gomez counters that "films in English and in Spanish will be made as long as there is a market" and that he currently has no plans to shut down his Lola UK London operations.
"Admira has opted to stabilise the financial structure of the production house, troubled by significant losses which put its own continuity at risk," according to local reports based on Admira's official summons for the March 22 meeting. "Telefonica trusts that the plan... and the quality of various films now in post-production will allow the continuity of Lola Films without greater contributions of supplementary funds."
Sources at Admira confirm that Lola, one of Spain's top two producers, is "vital for us as at a content level" for sister interests such as TV platforms Via Digital and Antena 3.
Rumors flew earlier this year that Telefonica - eager to cut costs across the media filial which posted Euros 347.3m in net losses last year - was considering selling its shares in Lola back to Gomez.
Telefonica's cost-cutting efforts at Via and Antena 3 are being felt across the Spanish film industry.