Indie distrib Enterprise Pictures’ plunge into receivership is another sign of the sad state of British entertainment.
At the same time, trading in stock of publicly-quoted Video Store Group, which owns a chain of vid rental outlets, was suspended pending clarification of its financial position.
Both companies are burdened by heavy bank debts and appear to have been hit by U.K.’s high interest rates. In addition, the formerly fast-expanding Video Store has suffered from the sharp decline in the vid rental market.
Appointment of receivers at Enterprise followed a decision by the company’s bank, Barclays, which is owed £900,000 ($1.8 million), to recall its loans. Enterprise execs blame the bank’s change of heart on the U.K.’s worsening economy and on the poor outlook for entertainment and leisure industries.
Barclays, which in recent years has built a substantial film and tv business by discounting foreign sales contracts, administering production accounts and providing currency protection for distribs, has lately become the subject of rumbling discontent among industryites who believe it has taken a mean view of clients’ current difficulties.
But a bank spokesman said that the decision did not reflect any change of policy on its part. “Naturally any lender will review his position according to what is actually happening within the company concerned,” he said. “But our general policy towards the industry has not changed.”
Barclays also extended a loan facility to Video Store, which reportedly owed about £4 million ($7.8 million) last November, when talks were opened with the bank with a view to putting the company back on track. In the nine months to November, Video Store reported losses of £2.5 million ($4.9 million).
Reversal of position
Enterprise execs say they agreed on a loan facility with Barclays last January. This was reviewed in March, when the bank, they say, verbally agreed an increase. Then in October, the bank reversed its position and put a cap on credit.
Per execs, Enterprise sought to transfer its banking to Security Pacific Bank, but, on the eve of the deal, it decided to put a hold on new business in Europe. Enterprise then entered into negotiations for an equity injection from Ensign Trust, but that was scuppered by upheaval at Ensign.
Failure of Ensign to meet completion date of Jan. 24 led to Barclays putting a freeze on the Enterprise account. Enterprise shareholder Sleipner (U.K.), local branch of a Norwegian merchant bank, apparently made an offer to take over the company’s debts, but terms were not good enough for the bank.
Subsequent expressions of interest from would-be buyers have so far come to nought. Main question concerning Enterprise in the film biz is what will happen to the company’s upcoming release slate. These include Wim Wenders’ “Until The End Of The World” from Majestic Films, Wolfgang Petersen’s “Plastic Nightmare” (a.k.a. “Shattered”) from Cinevox and a clutch of new pictures from New Line, including “Book Of Love.”
Receivers, who are charged with getting the most value out of the company for its creditors, have a limited time in which to find alternative distribs for the titles. If they fail, the rights will revert to their original owners.
Two other Enterprise releases, “Hidden Agenda” and “The Field” have already been saved by special arrangements with investors BSkyB and Granada TV, respectively, who have put up p&a coin. In the case of “The Field,” two distribution execs at Enterprise, Colin Hankins and Janette Day, will work with Granada over the launch period.
Enterprise chief exec and major shareholder John Hardy has bought out projects the company, which had production ambitions, had in development. These include “The Blunderer,” to be directed by James Dearden; “Back Again,” to be directed by Jon Amiel; “Roof world,” written by Scott Roberts’, and a tv series based on “Queen Of Hearts.”