Singapore-Oz financing facility launched to cashflow offset

The financing facility has the backing of IFS Capital Limited, which has initially put aside $8.7m (A$10m) for use by films accessing the producer offset. IFS has been listed on the Singapore Stock Exchange since 1993 and has offices or associates in Thailand, Indonesia, Malaysia and Hong Kong.

SAPO is represented in Adelaide, South Australia, by producer Mario Andreacchio and in Singapore by businessman and executive producer John Sim. SAPO stands for Singapore Adelaide Producer Offset.

“This is a new alternative for producers needing to find money to cash flow the producer offset and we also see it as contributing to industry development, particularly in South Australia,” said Andreacchio, who has considerable co-production experience. “With a new studio going up and this facility, the South Australian industry will be taken more seriously.”

While this makes the fund sound very focused on South Australia, Andreacchio emphasised it would be available to anyone using the offset and said that the long-term plan was to expand into Europe and Canada.

He would not comment on terms, saying it was not possible to generalise given changing interest rates, currency fluctuations and the unsteady international financing climate.

“If the projects are commercial enough we would consider trading interest on the loan for equity in the film, thus helping producers to close their deals,” he said.

SAPO would not shy away from low-budget films as some other lenders do, he added: “Some of those up to $5.2m (A$6m) are finding it hard to get cash flow because financiers don’t think it is worthwhile to do the contracting. We will streamline the process online, give people the financial tools they need, and may consider running seminars on film financing using the offset.”

Andreacchio’s production entity is AMPCO (Adelaide Motion Picture Company) Films and he met Sim about a year ago during the financing of The Last Dragon. Sim was representing the Singapore and Chinese investors. The official Chinese/Australian co-production is in pre-production but, because he plans to announce details next week, Andreacchio was tightlipped about revealing more.

“The two things (SAPO and The Last Dragon) are not related although SAPO is partly about trying to create a sustainable business: you can’t just produce films, you also have to be involved in distribution, infrastructure and finance.”

IFS has businesses in Indonesia, Thailand, Malaysia and Singapore. There is a co-production treaty between Singapore and Australia.

Other companies that are cash flowing the offset in Australia include Fulcrum, the joint venture between Emile Sherman and Sharon Menzies, James Vernon’s outfit Media Funds Management and private bank Investec.