Steven Reuther’s Bel Air Entertainment has arranged a $225 million financing facility with a consortium of banks led by the New York office of Westdeutsche Landesbank.
Bel Air, which is jointly owned by Warner Bros. and France’s Canal Plus, will use the facility to fund its production slate. The company will pay back its borrowings over time as earnings from its releases flow in.
Bel Air held conversations with a number of financial institutions before settling with West LB, where the entertainment division is headed by Lucie Guernsey. In addition to West LB, ABN Amro and Dresner Bank co-agented the Bel Air deal.
The facility is set up to last six years, the course of Bel Air’s initial deal at Warners.
“This is the final piece of our initial business plan,” said Reuther, chairman of Bel Air. “Together with our strength in equity, we now have a financing facility for a program of pictures. We don’t have to look over our shoulders anymore.”
Philip Elway, who Reuther has upped to executive vice president of Bel Air, was responsible for putting the deal together on behalf of the Warners-based company.
Until now, Warners and Canal Plus put up all the funding for Bel Air’s pics. But both partners have always wanted the company to open its own bank account. The West LB facility, Reuther said, will now enable Bel Air to “rapidly increase” its production commitments.
Since officially forming in February 1998, Bel Air has co-financed one pic with Warners, Luis Mandoki’s “Message in a Bottle,” starring Kevin Costner.
The company has a number of pics in production, including “Shiny New Enemies,” starring Steve Zahn, Salma Hayek and Jeff Goldblum; and “The Replacements,” starring Keanu Reeves. Michael Cristofer’s “Dancing in the Dark,” starring Angelina Jolie, is due to begin lensing in October.
Although West LB led a $100 million credit line for October Films in November 1997, it has thus far been a relatively low-level player in Hollywood financings.
Bel Air was conceived as a co-financier for Warners and a product supplier to both partners. Warners has worldwide distribution rights in all media to Bel Air pics, excluding France, Spain and Germany, where all rights are held by Canal Plus.
Attorneys Joe Calabrese and Lesley Freeman, of O’Melveny & Myers, negotiated for Bel Air. Attorney Karen Robson repped West LB.