(24 November 2005 9:00 pm)

MUMBAI: Mumbai-based Crest Animation Studios Ltd is planning to raise around $30 million to fund three co-produced animated feature films.

Part of the fund-raising could be through equity dilution in Crest's US subsidiary company, RichCrest Animation (RCA). Crest is working with merchant bankers in the US and India to bring in an equity investor.

The fund requirement will be over three years. Crest plans to raise a mix of debt and equity. "Our preference is to find an equity partner in the US subsidiary company. As the agreement for the three feature films is between RichCrest and Lions Gate Entertainment, we feel it is better to fund our US company through a mix of debt and equity," says Crest Animation Studios chief financial officer Vinayak Purohit.

The State Bank of India has sanctioned Rs 450 million, funded as well as non funded facility, to Crest Animation. The animation company is also in talks with a leading bank to raise $5-7 million.

RichCrest Animation and Lions Gate Entertainment have signed a three-picture co-production and co-financing agreement. This will mark Crest's foray into the theatrical segment. The cost and profits are to be equally shared between the two companies. The first film under the new agreement will be Sylvester And The Magic Pebble, based on the Caldecott medal-winning story by the creator of the blockbuster Shrek. A second, currently untitled feature project, is in development, and the third will be identified in the near future.

The promoters' holding in Crest Animation Studios is 18.65 per cent, scaling up from 14.71 per cent with a recent preferential allotment of 8,87,330 equity shares at Rs 54 each.