D-Cinemas to get $525 million financing

MUMBAI: Decks are being cleared for a $525 million financing of up to 15,000 3D cinema (D-Cinema) installations over the next five years in US‘s three biggest film circuits viz Regal, AMC and Cinemark that will add 3D equipment at many of their cinemas.

The 3D add-ons will be considerably cheap, the cost of which will be borne by the theatre chains or in some cases even by the 3D vendors.

The studios previously signed off on so-called virtual print fee deals, which guarantee payments to exhibitors for years after studios cease having true film print costs. But the upfront costs of the conversions are so big that it will require help from Wall Street.

Hence JP Morgan is arranging a $325 million bank syndication and $200 million in equity-based contributions from private-equity firms and the circuits themselves.

The industry‘s rollout of digital and 3D hardware was stalled by the nation‘s economic downturn. Though the syndication will take a couple months to complete, word that the rollout soon can resume, comes as good news for distributors struggling to market 3D releases despite the scarcity of 3D screens.

Originally planned in early 2009, the syndication was first delayed until summer before lingering credit difficulties pushed its launch beyond Labor Day. The funding impasse -- which dragged on for the better part of a year -- has had studios with 3D releases competing furiously for a paltry base of 3D movie screens, both domestically and abroad.
Things grew so tense that the big three circuits got started on some of the DCIP conversions even before the financing was arranged.

There may now be fewer than 2,000 non-competitive 3D auditoriums in the U.S. and Canada. New installations could push that number to above 2,500 screens by the year‘s end.

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