‘Action’ called for film specialist customer!
The UK’s film industry is one of the largest and most vibrant in the world with global revenue of our films worth around £3bn every year. Find out how Close Brothers Leasing, Specialist Finance helped their customer secure significant funding to meet tight deadlines for high-profile films…
Background
Our client, a relatively new start business that specialises in the film and television production sector, was established by a highly experienced and credible team.
The opportunity was proposed by an existing introducer.
The Opportunity
The firm had been awarded a high-profile supply contract with a subsidiary of a major film company and needed to borrow the funds very quickly, but they were finding it difficult to secure the funding.
The directors were asked to provide state-of-the-art film recording equipment on hire, which would help the film company deliver the major 36-month film contract, which had guaranteed payment milestones.
But, time was not on their side – tight filming schedules meant they required a committed credit facility to both order the various equipment and meet delivery slots and times.
Solution
We established an ex-situ (off site) value for the equipment from one of our panel of valuers, which gave us the required confidence about potential resale value.
James Fletcher, Managing Director at Close Brothers Leasing, Specialist Finance, explained: “The real clincher was, after discussions with our customer and the film company, we were told we could take a charge over the contract between them, which guaranteed payment on a ‘hell or high water’ basis, and gave us the opportunity to better understand the strength of the film company, which is investment grade.”
In addition, the transaction was structured to match the supply contract, making it a three-year deal meaning they ran co-terminus (a lease that terminates at the same time as another lease).
Structure
- £4.3m Hire Purchase deal
- 36-month term
- Charge over their supply contract
- First ranking debenture over the business
Outcome
The businesses have gone from strength to strength - our client was able to successfully fulfil their commitment to the film company and benefit from a highly profitable contract.
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