Entertainment Industry

Scheme for Financing Film Industry

 

Scope of Scheme

Financing production of feature films, as defined under the Cinematograph (Certification) Rules, 1983.

Constitution/ Eligible borrower

Corporate entity promoted by reputed producers, backed by established directors and other technicians possessing satisfactory track record.

Quantum of assistance

Normally, not exceeding 40% of the estimated cost of the film or Rs.5000 lacs whichever is lower.

Debt Equity Ratio

Long Term Debt – equity ratio not to exceed 1:1

Promoters’ contribution

 

q Not less than 33% of the estimated cost of the film

 

q A part of the equity contribution (not exceeding 20% of the estimated cost of the film) may be raised in the form of advances from distributors, against sale of territories, music/video rights etc.

 

Period of Loan

Normally not exceeding two years

Profit sharing

Bank shall reserve the right of sharing upside of a film, in a manner to be decided on case to case basis.

Security

 

q Letter from film processing laboratory, conveying rights on the negatives of the film in favour of Bank

 

q Assignment of all agreements and intellectual property rights (IPRs) in favour Bank. Bank to have right in negotiation of valuation of all IPRs.

 

q A Trust and Retention Account (TRA) will be maintained for all capital as well as revenue inflows and outflows. The receivables on sale of all IPRs shall be credited to TRA. The modalities of TRA will be worked out to the satisfaction of Bank. NOC from all concerned parties for the TRA arrangement will be required. Bank will have first charge on the TRA.

 

q First hypothecation charge on all the tangible movable assests under the project

 

q Assignment of existing rights like music, video, internet, CD, DVD rights, library or old hit films etc.

 

Insurance Cover

The film would require to be comprehensively insured

Collaterals

As per bank’s policy from time to time.