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Cinedigm Lauds Chinese Investment Close, Widens Q2 Loss

16 Nov, 2017 By: Erik Gruenwedel

Home entertainment distributor Cinedigm Nov. 16 announced it formally closed the Bison Capital $30 million investment in Cinedigm following the Nov. 1 end of the second quarter. China-based Bison Capital now owns a majority of the distributor’s outstanding common stock.

“Strategically, the Bison investment will be the catalyst to create a unique competitive position for Cinedigm as a key independent content studio in both North America and China,” CEO Chris McGurk said in a statement.

Indeed, the transaction includes an additional $10 million loan from Bison to Cinedigm by Dec. 31, according to McGurk.

“We’re currently working with Bison to reduce or refinance additional debt,” the executive said on the fiscal call.

Specifically, Cinedigm believes it can now more effectively leverage over-the-top video assets Dove Channel, CONtv and Docurama, including expansion into China. Specifically, Cinedigm is eyeing distributing its digital projectors within the growing Chinese theatrical market.

‘This will create the potential for Cinedigm to become the first true China/U.S. independent studio,” McGurk said. “Bison provides the capital and the relationships to help achieve a bold vision for Cinedigm.”

The executive said Cinedigm would also distribute Chinese-oriented OTT video services in the U.S. Cinedigm will shortly announce deals to embed OTT video services with top consumer electronics manufacturers.

“This deal affords us critical placement usually only available to companies like Netflix, Amazon and Hulu,” McGurk said, adding an official announcement would occur before the end of the year.

Separately, the executive said the company maintains strong packaged-media distribution agreements with Walmart, Best Buy, Amazon, Target, Costco and Redbox, among others. Content and entertainment revenue totaled $6.3 million in the quarter.

“As we enter the holidays, our Christmas movies are seeing very solid performance,” McGurk said.

Finally, Cinedigm reported a Q2 loss of $7.5 million, widening a loss of $557,000 during the previous-year period. Revenue topped $16.2 million, down from $23.8 million.



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