KFC to finance projects in entertainment sector

Rs.2 crore for movies; Rs.20 crore to upgrade, build cinemas

July 07, 2012 01:47 am | Updated 01:50 am IST - THIRUVANANTHAPURAM:

Finance Minister K.M. Mani presents the first cheque to producer Sandhya Rajendran to mark the foray of the Kerala Financial Corporation into the entertainment sector, in Thiruvananthapuram on Friday. Photo: S. Gopakumar

Finance Minister K.M. Mani presents the first cheque to producer Sandhya Rajendran to mark the foray of the Kerala Financial Corporation into the entertainment sector, in Thiruvananthapuram on Friday. Photo: S. Gopakumar

The Kerala Financial Corporation (KFC) on Friday forayed into the entertainment industry with two new schemes, one for financial assistance for production of feature films and television serials, and the second, for assistance to cinema theatres and multiplexes.

Finance Minister K.M. Mani, inaugurating the schemes by handing over a cheque of Rs.75 lakh to Sandhya Rajendran and Rajendran, producers of the upcoming movie Hide & Seek, said the corporation should have made the move several years back, but as the adage went, it was better late than never. The State stood fifth in the country with regard to production of films, and Malayalam cinema was known for “its realistic portrayal of relevant subjects.”

The two new schemes, which entailed loans of up to Rs.2 crore for production of feature films, documentaries and television serials, and loans of up to Rs.20 crore for modernisation, upgrading and expansion of cinema halls and establishment of new multiplexes, came with interest rates less than those offered by commercial banks. Fifty per cent of the amount would be given as the first instalment while the rest would be handed over when the project was 70 per cent complete. The KFC had been giving “best dividends” for the State government and was expected to succeed in the latest endeavour as well, he said.

Yogesh Gupta, Chairman and Managing Director, KFC, said the lack of tangible security was one risk for loans in the cinema industry, but the Corporation, to mitigate this risk, would offer loans on easy terms and rates to finance requirements associated with production to reputed, experienced producers with established teams.

Rights over negatives, royalties like TV rights, music rights, CD rights, overseas rights and remake rights would form security for the loan, in addition to 100 per cent collateral coverage.

Recovery

As for the assistance to theatres and multiplexes, the scheme offered loans up to Rs.20 crore, with a provision for routing part of daily collections at these centres to the loan account.

While the loans for production ventures had rates of 14.5 per cent for repayment in 18 months, including rebates for prompt repayment and credit rating, those for theatres would have interest rates of 13.5 per cent, repayable in five years.

The security cover for the latter would be 1.75 times the loan amount.

N. Asok Kumar, General Manager, KFC, M. Mushtaq Ahamed, Deputy General Manager, KFC, Sasi Ayyanchira, General Secretary, Kerala Film Producers’ Association, M.C. Boby, General Secretary, Kerala Film Exhibitors’ Federation and Anil V. Thomas, General Secretary, Kerala Film Chamber, also spoke.

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