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EBRD and RZB loan for Russian multi-screen cinemas
EUR27.5 million loan facility from EBRD and ZAO Raiffeisenbank Austria
The European Bank for Reconstruction and Development and ZAO Raiffeisenbank Austria, the Russian subsidiary of Raiffeisen Zentralbank Österreich AG, are lending $27.5 million to support a major international strategic sponsor entering the Russian market in order to build five multi-screen, state-of-the-art cinema complexes in Moscow and St Petersburg.
EBRD is lending $17.5 million and reserves the right to syndicate part of the loan. ZAO Raiffeisenbank Austria is providing a parallel $10 million loan.
The seven-year facility aims to stimulate competition in this fast-developing sector of the Russian entertainment market and is being extended to OOO Rising Star Media.
Rising Star Media is a Russian joint partnership formed between National Amusements Inc., a leading cinema operator in the United States, the United Kingdom and Latin America, and Soquel Ventures, a company founded by American entrepreneur Paul Heth, who pioneered the development of Moscow cinemas to western standards in the 1990s.
Privately held National Amusements is the controlling shareholder of one of the world’s largest publicly traded entertainment and media company, Viacom.
The first of these five multiplex cinemas, an 11-screen complex, opened last September in what is Russia’s largest shopping centre, the IKEA Mega shopping mall on the outskirts of Moscow. In 2002, the EBRD advanced a $100 million, 10-year loan to IKEA for the construction of the Mega mall.
The second multiplex cinema will also be opened at IKEA Khimki shopping centre in Moscow in 2004, with the remaining multiplex cinemas to be built in Moscow and St Petersburg by 2006. All will be using the Kinostar brand.
Izzet Guney, Director of the Telecoms, Media and Informatics team at the EBRD said: The entry into the Russian market of an international cinema exhibition operator is important because it will stimulate competition, make available new technologies and contribute to making the market more transparent.
Michel Perhirin, head of Raiffeisen’s Russian operations, commented: “We have been cooperating with Rising Star Media for quite a while already and I am happy that, apart from being involved in many partnership programmes on the retail side, we now start financing this promising project on a corporate basis.”
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