Reliance Anil Dhirubhai Ambani Group (ADAG) chairman Anil Dhirubhai Ambani and DreamWorks Studios principal partners Steven Spielberg and Stacey Snider have completed the first phase of funding for their new motion picture company, based in Los Angeles, California.
J.P. Morgan Securities arranged the syndication of approximately $325 million of senior debt, which ADAG's entertainment arm Reliance Big Entertainment is matching with its equity commitment. The Walt Disney Studios, who will handle marketing and distribution for the studio, will also extend a loan to DreamWorks as part of the distribution deal.
The debt financing was led by J.P. Morgan, who brought together other lenders to set-up DreamWorks with its first wave of funds. Participants include Bank of America, City National Bank, Wells Fargo, Comerica, Union Bank of California, SunTrust, California Bank & Trust, and Israel Discount Bank.
Ambani said, "Our partnership with Stacey and Steven is the cornerstone of our Hollywood strategy as we grow our film interests across the globe. Given our faith in the business plan that they presented to us and despite the current economic climate, we were always confident that this day would come. Now Stacey and Steven can focus on producing more of the great films for which they are renowned."
"This will allow us to move ahead quickly into production with our first group of films. We wish to thank Anil personally for his foresight and fortitude over the past months. We congratulate J.P. Morgan for their leadership in attracting this funding during today's most challenging financial environment. Our thanks also to our distribution partner Disney who we look forward to working with in getting our movies out to the global audience," Snider and Spielberg said in a joint statement.
Joining Snider and Spielberg on DreamWorks' Board of Directors on behalf of the Reliance ADA Group are Reliance Capital vice chairman Amitabh Jhunjhunwala and J.P. Morgan's Alan J. Levine.
Levine led the Reliance team in structuring the capital and business plan for the company. "It took great dedication over many months to turn our vision for this company into a reality. The time spent by everyone navigating the changing economic waters allowed us to make the most responsible deal for DreamWorks and ensure that our partnership with Reliance, from the very beginning, was built on solid ground. We appreciate the faith our bank group has in our business plan and look forward to a long and fruitful relationship with them," said DreamWorks Studios president and COO Jeff Small.
DreamWorks has a long-term distribution deal with The Walt Disney Studios, which will market and distribute approximately six live-action films a year for the company, except for India where Reliance Big Entertainment will retain distribution rights. The first release under Disney's Touchstone banner is expected in 2010.
