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Grosvenor fund eyes Teuton tie

Co. poised to launch two equity funds for pic coin

LONDON — Grosvenor Park, the Anglo-Canadian film financier, is moving into Germany to raise DM1.05 billion ($504 million) for international production.

The company is poised to launch two equity funds under Germany’s revised tax law, which came into force Jan. 1.

One, raising up to $384 million, will be used to co-finance movies from a single Hollywood studio. Paramount is believed to be the leading contender for the deal.

The second fund of $120 million will be earmarked for pics from European entities, including FilmFour, Media Capital Partners and Fragile Films.

Global focus

The move marks a big step forward in Grosvenor Park’s strategy to position itself as a one-stop shop for multi-national production financing.

To enter the German market, the company has formed a joint venture with former Viacom exec David Molner. He was the architect of Paramount’s $1.5 billion in German tax financing over the past four years.

By adding German funds to its existing expertise in U.K. tax financing and Canadian subsidies, Grosvenor Park will be able to provide between 20% and 45% of the budget for a film, depending on its country of origin.

“If you can link the jurisdictions and do it accurately, you have the possibility to create a superstore of film financing,” comments Molner.

Straight equity

The German coin alone will cover about 20% of a film’s budget. It’s a straight equity investment, free of any obligation to use Teutonic talent or locations. But to ensure the films have real commercial potential, Grosvenor Park will only invest money in films with U.S. distribution.

The British sale-and-leaseback deals and the Canadian subsidies are typically worth 10% each, but are only available to qualifying national films.

“By combining the benefits of several countries, we can bring a producer 30% or 40% of the budget, without having to sell off any rights,” says Don Starr, chairman and CEO of Grosvenor Park.

The company has already laid down the template for such deals by putting up 25% of the budget for FilmFour’s $13 million “Buffalo Soldiers,” which started shooting last November.

It advanced 10% against the U.K. sale-and-leaseback deal, and invested 15% in equity. Because the film started before the new German tax regime came into force, Grosvenor Park drew the equity from its own pocket. But in future deals, that money will come from the German investors.

‘Carbon’ date

The two companies have now entered an ongoing co-financing agreement for FilmFour’s upcoming slate. The first project will be Mark Munden’s “Carbon Miranda.”

Grosvenor Park has struck a similar deal with Media Capital Partners, the London and L.A.-based financier that recently launched its own foreign sales arm.

The German indie fund, together with a U.K. sale-and-leaseback, will also put up around $4.5 million of the $15 million budget for Fragile Films’ “The Importance of Being Earnest,” directed by Oliver Parker and starring Rupert Everett and Judi Dench.

It is in negotiations with Renaissance Films to provide German and Canadian coin for the $45 million Bryan Singer project “Confessions of a Dangerous Mind,” starring Johnny Depp and George Clooney.

Molner would not confirm Paramount as the beneficiary of the studio fund, saying only that several majors are pursuing the deal. But once the first two funds, which are due to close March 31, are successfully launched to German investors, he expects to follow up with several more for a variety of Hollywood players.

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