Wednesday, 28 September 2016
Last updated 7 hours ago
Dec 2 2011 | 8:52am ET
His long-sought-after divorce with Elliott Management dragging on, Relativity Media's Ryan Kavanaugh has found a new source of funds to continue making movies.
Relativity has secured a $200 million loan from private equity billionaire Ron Burkle. Burkle's money will allow Kavanaugh to continue paying for its productions as well as to cover the marketing campaign for its latest release, "Immortals."
In exchange, Burkle's Colbeck Capital Management will get almost 5% of the gross box office receipts both from "Immortals" and Relativity's upcoming "Mirror, Mirror," featuring Julia Roberts. According to Reuters, terms of the loan are not clear—sources say the interest rate could be as low as 8.5% or as high as 15%, and that advertising and production costs may or may not be considered in Colbeck's cut of the receipts.
A JPMorgan Chase-led consortium has been in talks to buy out Elliott's 49% stake in Relativity. Those talks, while reportedly still ongoing, have apparently stalled. Elliott has provided the bulk of Relativity's financing, in excess of $1 billion.