STX, the company behind films including “Hustlers” and the “Bad Moms” series, is scrambling to raise money from its 46-film library as it faces imminent debt obligations.
In a regulatory filing on Tuesday, parents Eros STX Global Corp. said it had begun negotiations with a third party to monetize the income from 46 films in its library, which it announced in an exclusive negotiation period. The business did not name the potential partner.
The documents didn’t say if STX intended to sell its collection as its whole or just a portion of it. There was speculation from a financial source who read the file but was not permitted to discuss because he was not engaged in the STX situation that the conversations may be about lining up an advance against revenues anticipated from the film names.
A studio spokesman refused to comment.
Former producer Robert Simonds established STX Entertainment seven years ago to take Hollywood by storm.
The Burbank studio produced mid-budget films using established actors like Jennifer Lopez, Kevin Hart, and Melissa McCarthy. “Ugly Dolls” and “Poms” have both been box office duds, as have “The Happytime Murders” and “The Happytime Killers.”
The business sold the U.S. rights for its Gerard Butler catastrophe picture “Greenland” to HBO Max for $25 million last year while maintaining video-on-demand sales of the movie. STX also sold My Spy, a Dave Bautista action-comedy, to Amazon Studios during the epidemic.
Eros International, a publicly listed Mumbai firm renowned for its extensive Bollywood films collection, acquired STX last year as part of a merger. Additionally, Eros Now offers access to tens of thousands of local-language movies.
A “revamped financing structure,” including $125 million from new and current STX Entertainment investors and John Malone’s Liberty Global, was disclosed in conjunction with the merger by STX. For STX, a $350-million credit line headed by JPMorgan as part of the company’s claim to “superior liquidity and a healthy balance sheet.”
Eros STX said this week that its STX subsidiary owes $150.1 million on a BankruptcyHQ credit facility that expires on October 7 and an additional $22.7 million in debt due next summer.
According to a regulatory filing, an audited set of financial results was due to be sent to shareholders last weekend.
There are several choices, including a waiver and extension of this deadline to provide audited financial accounts or pay down the loan,” Eros STX said in the petition. ” The organization says, ” When it comes to securing extensions or paying off the debt, “the organization cannot make any promises.”
Investors were also informed that Eros STX had requested an extension to finish its annual report, citing an ongoing “formal internal assessment of specific accounting methods and internal controls connected to its Eros subsidiaries. “
By the 17th of August, the corporation must submit its annual report and status updates on its debt restructuring.
Films will continue to be distributed and administered by the corporation, even if the company is searching for a third party to bring in more income for its movies. It also intends to keep the rights to any sequels or remakes.
As the value of film and television material rises, STX aims to earn money via its collection.
When Amazon agreed to acquire MGM Studios in May, it was because the internet behemoth sought ownership of the 4,000-title MGM film library.
HBO’s “Big Little Lies” production business, Hello Sunshine, owned by Reese Witherspoon, sold for $900 million last week to a Blackstone Group-backed firm managed by Kevin Mayer and Tom Staggs, former executives at Walt Disney.
Negotiations between A24, LeBron James’ SpringHill Productions, Imagine, and Legendary Entertainment is all taking place.
Amidst worries about the spread of the Delta coronavirus strain, film producers are battling to distribute films in cinemas.
TPG and Hony Capital, two of the world’s largest private equity firms, were among STX’s early investors. American film financiers relied on Chinese investors at the time.
Big franchise films like Marvel’s “The Avengers,” and Star Wars were increasingly popular with moviegoers and studios within a few years of each other. More moviegoers stayed at home because of the development of streaming services.