Business & Finance

Macquarie Offers Investment Opportunity in Global Large Format Films

Entertainment Wire - May 30th, 2001

Australia's only listed investment bank, Macquarie Bank, is offering retail investors the opportunity to invest in a 3D animated Large Format Feature (LFF) film, Hatchling, to show in IMAX-style theatres worldwide. The offer aims to raise $AUD9.96 million from investors with the minimum investment starting at $3,000 for 3,000 units of $1 each.

Hatchling will follow the story of a juvenile dinosaur from its birth to maturity, as it is separated from its herd and battles to survive the hazards of its pre-historic world and rejoin its clan. Along the way the film will explore the science of forensic palaeontology.

Mr. Charles Wheeler, Executive Director of Macquarie Bank said: "The development of LFF technology has seen a marked escalation in both LFF theatre numbers and growth in the number of LFF audiences worldwide. There are presently over 320 LFF theatres internationally. Of these 49 LFF theatres were constructed in 1999, and a further 70 are planned to open by the end of 2002, when Hatchling is due for release."

The annual total large format film audience exceeds 100 million moviegoers, with the Australian market only a small proportion of the total audience. Most LFF theatres are independent and attached to museums, educational institutions or theme parks and do not compete for the same audience as standard cinemas.

"A critical key to the financial model is the shortage of films in the 3D format and the proliferation of 3D theatres in the world which are demanding quality films. In 1994 for instance, 3D theatres accounted for only 5.3% of LFF films, rising to 29.4% in 2000. By the end of 2001 the number of 3D theatres is expected to increase to 142, approximately 35 per cent of the LFF market," said Mr Wheeler.

"As a result there is a shortage of 3D films being produced to meet demand. Only 3 of the 23 LFF films set to be released in 2001 are 3D and only 3 more are now in production for release in 2002 and 2003," Mr. Wheeler said.

Examples of recent LFF successes include:
Title	Year Released	Estimated Box Office $US
Grand Canyon: The Hidden Secrets	1984	150 million
Everest	1998	106 million
Fantasia	2000	89 million
Mysteries of Egypt	1998	70 million
T-Rex	1998	58 million

The film is to be co-produced by Mr. Richard James, who has produced seven successful LFF projects including Grand Canyon: Hidden Secrets, Mysteries of Egypt and Whales. Mr James is also the founder and CEO of Cinema Group LLC, who will distribute the film.

"Hatchling has generated significant interest in the large format film world. LFF theatres, including IMAX theatres are desperate for content, especially for 3D films. In my the experience of the LFF industry, the expressions of interest in this film are unprecedented," Mr. James said.

As an example of the keen interest in the film Hatchling has already secured distribution guarantees for $US2.3m in the first year of release.

With the Australian dollar trading at such a discount to the US dollar, Australia has become an obvious place to produce such films and the Hatchling will be produced at a specialised animation facility in Perth, Western Australia, for under $AUD10 million.

A sixty second test sequence of the Hatchling has already been produced, the test sequence can be viewed at this site later this week.

Prospective investors who are interested in receiving a copy of the test sequence are invited to email Macquarie's Tina McElligott.

For further information please contact:
Charles Wheeler, Macquarie Bank, (02) 8232 3323; Mark Butcher, Macquarie Bank, (02) 8232 6136; Matthew Russell, Macquarie Bank, (02) 8232 4102; Richard James, Cinema Group LLC, +1 801 786 1494.