Village growing pic deal

VRP prod'n arm makes financial restructuring an option

By DON GROVES

SYDNEY -- Village Roadshow wants to ramp up its co-productions with Warner Bros., but to do so it will have to come up with new financing arrangements for its L.A.-based production unit Village Roadshow Pictures.

The Aussie firm said this week it intends to step up VRP's annual output to eight films in 2005 and 2006; this year Warners and VRP are releasing five titles, including "Cat Woman" and "Ocean's Twelve."

Company said it's exploring the possibility of "re-engineering" its investment in VRP, with the options including debt, converting debt to equity or strategic partnership. VRP has a $900 million credit facility with a syndicate of banks plus $100 million from its parent.

"The production division continues to provide exciting growth opportunities," it said. "It is the board's view that re-engineering will broaden and strengthen Village Roadshow Pictures and create a more secure base from which to grow."

Village has just spent $77 million to buy back 90 million preference shares to improve its financial structure. It's considering buying a further 60 million prefs and to fund that intends to sell non-core assets.