Government converts debt into equity
LONDON — The Indian government approved plans Thursday to revive the loss-making National Film Development Corporation.The NFDC owed the government Rupees 280 million ($6.1 million) in outstanding loans and interest. The government will convert this into equity, thus increasing the net worth of the body to $10.5 million. In addition, the government will infuse $650,000 into the NFDC. This amount, coupled with another $650,000 due to the NFDC via recovery of outstanding dues, will be used to finance a network of digital arthouse theaters, and upgrade their properties and computers. A statement from the ministry of information and broadcasting said: “The NFDC expects to commence making profits from 2010-11 onwards. A higher level of equity in the corporation will enable it to fulfil its mandate of promoting the growth of Indian cinema.” The NFDC was incorporated in 1975 and turned profits until 2002-03. A major source of its income came from state-run TV channel Doordarshan sharing its advertisement revenues with them. With the proliferation of private channels in India from 2000, Doordarshan’s revenues shrank as advertisers moved elsewhere. Also a substantial part of its advertisement revenue was the subject of litigation and remained unrecovered. The body also has a remit to make films and has produced more than 300 art-house films in 18 Indian languages, and is responsible for much of the neo-realist Parallel Cinema movement of the 70s and 80s. NFDC has tapped former Sony exec Vikramjit Roy as its head of production, but no new production funds have been allocated yet.