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Reliance ADAG, DreamWorks close to $825 mln film financing deal

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Reliance ADAG, DreamWorks close to $825 mln film financing deal

LOS ANGELES – july 16 – Director Steven Spielberg’s DreamWorks Studios could receive $825 million in film financing to begin producing movies starting this year, Reliance ADA Group which is involved in deal talks said on Wednesday.

The Indian conglomerate is in talks with DreamWorks Studios partners Stacey Snider and Spielberg in New York, and the $825 million figure has emerged from those talks as a possible funding slate for DreamWorks Studios.

The deal between the two companies, which announced a plan to work together last year, has not been finalized.

But the ongoing negotiations over financing come after DreamWorks Studios said in February that the Walt Disney Co would distribute its films.

Under the terms of the deal, which could allow DreamWorks to make five to six films a year, Reliance would match whatever financing DreamWorks can get from a syndication of banks.

The $825 million funding slate announced by Reliance would break down as $325 million from the Indian conglomerate, $325 million from the banks and $175 million from Disney.

But the total amount could change if DreamWorks raises more from banks. That would increase the matching equity investment from Reliance, which has agreed to provide up to $550 million.

The deal between Reliance and DreamWorks was initially valued at $1.2 billion, but Amit Khanna, chairman of Reliance Big Entertainment, a division of Reliance ADA Group, said that much money is not needed now.

“If so required, we will raise the money at a later stage through a balance of debt and equity,” Khanna told Reuters.

With the downturn in the global economy, DreamWorks had trouble securing financing from banks in recent months.

“This venture with Reliance opens a new door to our future,” Spielberg said in a statement.

“Their visionary step has given us a new set of dreams to work toward,” he said.

The newly created DreamWorks Studios is a production unit separate from listed DreamWorks Animation SKG Inc.

Under the deal, Disney would market and distribute the studio’s films around the world, except in India where Reliance would retain distribution rights, Reliance said.

No date was given for when Reliance and DreamWorks Studios expect to close their deal.

DreamWorks has looked for funding since last year, after cutting ties with Viacom Inc’s Paramount Pictures.

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SCENARIOS – North Korea tensions set to simmer

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Philip Goldberg, the U.S. envoy who coordinates sanctions on North Korea, talks to journalists after a meeting at the Central Bank office in Kuala Lumpur July 6, 2009.

SCENARIOS – North Korea tensions set to simmer

SEOUL (Reuters) – North Korea raised regional tensions with a defiant ballistic missile launch at the weekend that came as the United States pressed sanctions to punish Pyongyang for its nuclear test in May.

Following are some scenarios at how current tensions may play out:

CONSTANT SIMMER OVER SUMMER

– North Korea launches further military moves seen as provocations by outside world through summer in North Asia.

– More missile launches likely, including ballistic and short-range.

– May try to test U.N. sanctions to halt arms trade imposed after nuclear test by sending cargo ships abroad.

– Good chance North Korea will test fire its long range Taepodong-2 missile, which could hit U.S. territory but has not had a successful test flight. Pyongyang backed itself into corner by saying in its state media it would fire one unless the U.N. apologised for punishing it for an April launch of similar rocket.

– North may try to spark a small-scale skirmish with the South near a disputed sea border.

NUCLEAR TEST

– The North could conduct a third nuclear test, which is needed to help it build a working bomb and thus bring it closer to miniaturising a nuclear weapon to mount as a warhead on a missile. Experts said its first nuclear test in October 2006 was only a partial success because it had a low explosive force, indicating design flaws.

– Each test decreases the North’s already meagre supply of plutonium, thought before the May 25 test to be enough for six to eight weapons.

NUCLEAR ARMS PROGRAMME

– North Korea could resume all operations at its Soviet-era Yongbyon nuclear plant. It has said it is already reprocessing plutonium at the plant that was being taken apart under a disarmament-for-aid deal.

PRESSURE TO INCREASE PUNISHMENTS

– Each move regarded as a provocation makes it more likely that China, the North’s biggest benefactor and trade partner, will be forced into greater cooperation with the sanctions regime. China is the key player for enforcement, analysts said.

– U.S. may move to punish banks thought to be helping the North in illicit activity. The U.S. Treasury brought North Korea’s international finances to a virtual halt in 2005 by cracking down on a Macau bank suspected of aiding the North’s illicit financial activities. Other banks, worried about being snared by U.S. financial authorities, steered clear of the North’s money.

– North Korea’s broken economy, with a yearly GDP estimated at about $17 billion, may buckle under the pressure. Any bad weather that effects farming could also send it into a tailspin.

RATCHETING DOWN PRESSURE

– Analysts said the North may look to return to international disarmament-for-aid talks toward the end of the year due to hit to its finances.

– North Korea firms up succession plans in Asia’s only communist dynasty, removing pressure on leader Kim Jong-il, 67 to increase internal support through military moves.

MAJOR CONFLICT

– Unlikely. Analysts say all-out war would be suicidal for Pyongyang because U.S. and South Korean forces would quickly defeat the North’s ill-equipped, 1.2-million-strong army.

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China comes to Canary Wharf company’s rescue

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China comes to Canary Wharf company’s rescue

LONDON  – China?s state sovereign wealth fund has bailed out the heavily indebted majority owner of London‘s Canary Wharf, according to the real estate development’s owner.

The Financial Times newspaper reported that the move by China Investment Corporation (CIC) was its first big investment in Britain.

The owners of Canary Wharf, Songbird Estates, said in a statement that CIC would form a consortium with Qatar Holding, the Qatari sovereign wealth fund, and a number of existing investors, to provide more than 800 million pounds (900 million euros, 1.3 billion dollars) in new equity.

The money is needed to pay 880 million pounds that Songbird owes to US bank Citigroup. David Pritchard, the chairman of Songbird, said the deal had saved Songbird from bankruptcy.

“This deal secures the future of Songbird on the best possible basis for our shareholders,” he added.

Qatar will become the largest shareholder in the group with a stake of just below 30 percent with US private investor Simon Glick taking 27 per cent and CIC taking around 19 percent, the Financial Times said.

The Canary Wharf development in east London‘s Docklands houses the offices of major banks and media and newspaper groups.

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