Guinness, CBC launch Film fund

Merchant bank Guinness Mahon and the Completion Bond Co. have launched Partners in Film, a co-venture providing one-stop financial and insurance services to U.S. and European producers.

The non-exclusive venture, operating out of CBC’s L.A. headquarters and Guinness Mahon’s London offices, aims to service up to 10 pictures annually.

Producers are being offered insurance, completion guarantee, production finance, collection service and advice on how to structure packages.

Guinness Mahon director Premila Hoon says she wants to form long-term relationships with producers turning out films chiefly budgeted up to $ 10 million.

She does not rule out facilitating more costly pictures, citing such productions as Richard Attenborough’s upcoming $ 22 million “Shadowlands,” which Savoy has secured domestically. Guinness Mahon discussed jointly funding the film with L.A.-based Daiwa Bank but could not agree on terms.

“Our problem right now is not how much we can cope with, but the lack of (indie) projects” that meet her criteria, said Hoon.

She appears wary of the big budget realm, observing that indie films costing upward of $ 20 million “tend not to be successful.” She learned that the hard way at Guiness Mahon, co-financing Jeremy Thomas’ pictures. But, she said, “We’ve never lost a penny on U.S. films.”

The bank has been more comfortable in the past year or so, arranging finance for “Howards End,””The Crying Game,””Bob Roberts” and “The Lawnmower Man,” all of which were low to moderate in cost.

Seeking business at AFM

Marc Vlessing, Guinness Mahon entertainent finance consultant, is looking to drum up business for Partners in Film in a visit to Los Angeles prior to the American Film Market, which begins Feb. 24 in Santa Monica and which Hoon will attend.

The bankers also hope that CBC’s lengthy contact list of producers will generate deals.

The partners flagged their intention to join forces at the Cannes film market last year and since then have formalized the structure and the profits split.

“We can do things together that we could not do on our own,” Hoon said.

Guinness Mahon has a Japanese parent, the Bank of Yokohoma, which has corporate clients prepared to put up equity finance allowing them a Japanese tax shelter, Hoon said.

Those investors have fully financed films that were in post-production (the timing mandated by the tax laws), using Nippon Film Development and Finance as a conduit.

Hoon had hoped to assemble European banks to jointly fund films but suffered a setback when longtime collaborator Pierson, Heldring & Pierson of the Netherlands and France’s Credit du Nord declined to join.

Playing partners

But, she said, active European and U.S. players in international film financing include Daiwa, Paribas, ING, Berliner and Coutts & Co.

Ongoing relationships with producers are preferable to single-picture deals, because, on the latter, “Four or five banks may compete for the business, and that spoils the marketplace,” she said.

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