I’ve been hearing a rumor for the past few days that DreamWorks 2.0 supposedly can’t get a bank loan. Here’s what my reporting turned up: the heads of the start-up independent film company, Stacey Snider and Steven Spielberg, were advised to slow down the bank syndication process in order to let the capital markets stabilize in these volatile financal times. J.P. Morgan pursued this strategy right after the Lehman Bros/AIG collapse. So everyone has extended the time period within which the deal can/will close until the end of First Quarter 2009 (which is March 31st) instead of the beginning of First Quarter 2009 (as originally planned).
“It’s a ridiculously tough market, but all the indications are positive,” an insider tells me. “We should be fully funded and operational no later than April 1 and maybe earlier.” The deal is for Mumbai-based Reliance ADA Group to invest $500 million equity and for J.P. Morgan Chase to arrange another $700 million in debt toward the new film company. The DreamWorks 2.0 team saw no reason to make the delay public, so of course the rumor mill began working overtime. “It wasn’t a ‘big decision’ because the how and when to syndicate the loan had never been set in stone,” the source tells me. “We had barely closed the Reliance deal when the market took its turn. When it did, it was an easy and informal and obvious decision that we made to take a few extra weeks to let the the markets stabilize. But other than losing a few weeks during the initial market turmoil, nothing else is different. I have to say the guys at Reliance have so far been spectacular partners: the economy has gone crazy, and they have not wavered.”
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- DreamWorks Tells Owner Paramount Friday AM That Reliance Deal Signed
- CAA Put DreamWorks With Reliance: Hollywood Agency To Pocket Millions
- GE’s Immelt Takes Spielberg To Dinner; Zucker & Director Plot Universal Backlot
- Greenlight For DreamWorks-Reliance Deal
- DreamWorks Finds Indian Big Bucks To Form New Film Biz
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