Steven Spielberg is delaying a plan to raise about $700 million in debt for his DreamWorks SKG film studio till April because of financial turmoil, a person familiar with the situation said.
DreamWorks executives and banker JPMorgan Chase & Co, which is leading the debt offering, have slowed efforts to raise the money until financial markets improve, said the person, who spoke on condition of anonymity because the funding is private. The funding, previously targeted for January, will probably not be complete by the end of the first quarter, the person said.
The delay reflects the difficulty in borrowing after the collapse of credit markets in October. Spielberg left Viacom’s Paramount Pictures and signed an agreement in September with Mumbai-based Reliance Entertainment, including about $500 million in equity from Reliance besides the debt being raised by JPMorgan.
Under Paramount, DreamWorks produced Transformers, the third-highest grossing movie in the US and Canada last year at $319.2 million, and Indiana Jones and the Kingdom of the Crystal Skull, third this year with $316.5 million in domestic ticket sales, according to Box Office Mojo LLC, which tracks industry data.
DreamWorks founders Spielberg, Jeffrey Katzenberg and David Geffen sold the studio to Viacom for $1.6 billion in 2006. Viacom keeps the film library and will split projects that were already in development with the new DreamWorks.
Katzenberg separately runs Glendale, California-based DreamWorks Animation SKG Inc.
JPMorgan spokeswoman Tasha Pelio didn’t immediately return a call seeking comment.
The funding delay was reported earlier by on the DeadlineHollywoodDaily blog.
