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The Government today (October 17) published a consultation paper on a proposed pilot scheme to set up a guarantee fund to assist local film production companies to obtain bank loans for the production of films for commercial release.
According to the proposal, the Government will establish a Film Guarantee Fund (FGF) with a one-off injection of $50 million to provide a loan guarantee to lending institutions which will offer loan facilities for film productions.
A spokesman for the Television and Entertainment Licensing Authority (TELA) said that the purpose of setting up the scheme was to facilitate the establishment of a financing infrastructure and culture for film production in Hong Kong.
"This is a loan guarantee scheme. The Government has no intention to invest or take part in film production," the spokesman emphasised.
The main features of the proposed FGF are as follows:
- It will operate initially for two years on a revolving basis, i.e. loan guarantee discharged will be ploughed back for providing guarantee to new applications.
- $50 million will be set aside from the $100 million Film Development Fund to guarantee films with a maximum budget of $7.5 million each.
- All film production companies registered in Hong Kong that have produced at least three films in the past five years for commercial theatrical release in Hong Kong are eligible. In case of a newly formed company with no track record, it is eligible if the producer or the director of the film in question has produced or directed at least three films in the past five years for commercial theatrical release in Hong Kong.
- At least 50 per cent of the major cast and crew of the film in question are Hong Kong permanent residents.
- The film production company has to bear at least 30 per cent of the budget and has to secure a film completion arrangement for the film.
- The FGF will guarantee 50 per cent of the loan provided by a financial institution, i.e. a maximum of 35 per cent of the budget, or $2.625 million at the maximum.
- The FGF will not look into the theme or content of the film, which will eventually have to be classified under the three-tier film classification system before exhibition is approved in Hong Kong.
The scheme is drawn up with reference to the former Special Finance Scheme launched to support small and medium enterprises (SMEs), and the Business Installations and Equipment Loan Guarantee Scheme for SMEs currently in operation.
"Film production companies, without sufficient collateral, face the problem of obtaining bank loan as many SMEs. If the new scheme is implemented, we envisage that at least 19 films can be guaranteed at any one time and the total production cost can be over $140 million," the spokesman said.
The proposal to set aside $50 million from the Film Development Fund for the purpose will be subject to the approval of the Finance Committee of the Legislative Council.
The Government welcomes views from all quarters of the community. Views and comments on the consultation paper can be sent in writing on or before November 6, 2002 to the TELA on 39th floor, Revenue Tower, 5 Gloucester Road, Wan Chai, or by fax (2824 0595) or by e-mail (info@fso-tela.gov.hk).
Hard copies of the consultation paper are available for collection at the TELA and the Information Technology and Broadcasting Branch of the Commerce, Industry and Technology Bureau on 2nd Floor, Murray Building, Garden Road, Central. The paper can also be accessed on the websites at http://www.info.gov.hk/tela/f_whatsnew.html and http://www.info.gov.hk/itbb. For enquiries, please call 2594 5729.
End/Thursday, October 17, 2002
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