One week prior to a court confirmation hearing of its reorganization plan, Relativity Media has announced that it has secured $100 million in new equity commitments to jump-start the bankrupt company and resume film production and distribution.
The company’s announcement said it has gathered “more than $100 million in additional commitments from current investors,” including Macquarie Bank, investor Joseph Nicholas, VII Peaks Capital, Carey Metz, chief investment officer of Atorus Investment Management, new investors TomorrowVentures and Carat Global, and Ryan Kavanaugh, the entertainment company’s founder and CEO.
Kavanaugh and Nicholas had already agreed to assume $180 million in Relativity’s senior debt, in anticipation of converting the debt during the reorganization.
The company has also pledged to secure an “ultimates” loan before its emergence from six months in Chapter 11 status. That facility is being syndicated by GHL & Company and Aperture Media Partners. The announcement says that Carat Global has agreed to extent credit to Relativity for its P&A capital and declared that “Relativity’s debt need is much less than expected.”
Kavanaugh claimed the new funding will put his company back in the thick of the film business. “With the total financing commitments now successfully in place, we remain focused on emerging from Chapter 11 and moving forward with our robust slate of films and our continued evolution as a 360 degree content engine,” Kavanaugh said.
There has been abundant skepticism in the entertainment community about whether Kavanaugh would be able to secure the funding to re-energize his company. He previously announced that Keven Spacey and Spacey’s producing partner, Dana Brunetti, would become the new executives in charge of Relativity Studios, with Spacey serving as chairman and Brunetti as president.
Kavanaugh and his company have previously announced new investors, only to have those commitments fall through. But Relativity’s latest announcement predicts that, with the new commitments and the involvement of Spacey and Brunetti, the company is ready to again be a significant player in the Hollywood film business.
The latest announcement says that Kavanaugh and Nicholas will be co-managers of parent company Relativity Holdings, which runs the film studio and also holds some or all units involved with branding, sports management, digital information and education. The film studio will be managed by Spacey and Brunetti.