Germany's VCL Film + Medien's "liquidity bottleneck has been uncorked by a $33.9m financial package provided by a consortium of banks and other investors, led by France's Societe Generale. It will help to secure the financing of the first two Woody Allen films in VCL's three-picture deal concluded in June 2000.
The company's difficult financial situation was underlined by its announcement that it has reduced its sales forecast for 2001 to Euros152m due to "the changing market environment" of sluggish TV sales to German broadcasters and the knock-on effects of the threatened writers' and actors' strikes in Hollywood.
Sales reached Euros23m for the first three months of this year, compared with Euros8.7m for the same period last year, with 100% subsidiary Scanbox Entertainment - consolidated for the first time - accounting for Euros11.2m and VCL for Euros11.8m.
The banks' cash injection comes as VCL announced that it will be focussing again on its traditional core business of home entertainment and limiting its future activities in rights trading "to the acquisition and utilisation of licensing rights for the sales markets that the VCL Group covers directly", ie the German-speaking areas and Scandinavia.
The company also noted that "further financing is to be generated through lending on the VCL library for which external experts have given a value - including discounting - of Euros94m".