Digital cinema service vendor XDC has secured
€100 million of funding from Fortis Bank, allowing the company to
finance more than 2,000 digital screens across Europe.

After nearly one year of negotiations with the
Belgian bank, the funding, in the form of a senior debt facility,
will enable XDC to complete the first phase of the ‘virtual print
fee’ (VPF) based roll-out of its European digital cinema deployment
programme.

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The VPF model is a form of financing whereby a
third party pays upfront for the digital equipment, with
distributors and exhibitors paying over time to recoup the
cost.

XDC already operated ‘traditional’ leasing
agreements with 400 cinemas across Europe, but found the funding
line from its funding panel of six banks was too limited.

“We wanted to find a way where the studios
could co-finance the screens,” said Fabrice Testa, XDC
vice-president of sales.

By securing VPF agreements with all six major
US studios (Warner, Fox, Universal, Paramount, Sony and Disney),
XDC was able to convince Fortis Bank it had a solid business plan,
and secured two €50 million tranches of senior debt.

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Testa estimates they will make a return on the
VPF screens “within eight years”, adding the equipment has a
lifetime of around 15 years.

“This is a very interesting model, and with a
commitment from the Hollywood studios that they will co-finance up
to 8,000 screens, we are confident of our success,” Testa
added.

• A subsidiary of Euronext-listed
digital equipment manufacturers EVS, XDC has been active in the
digitisation of the cinema industry for nearly 10 years.
Headquartered in Belgium, XDC today provides end-to-end digital
cinema solutions that encompass the equipment, finance, as well as
integration, training, installation, support, content management
and delivery. To date, the company has installed more than 500
digital screens in 10 European countries.

Jason T Hesse