A completion guarantee is a bond provided by the guarantor that a film will be finished within the agreed time schedule. This guarantee is given to the film financier and basically insulates the financier from any overruns that result in cost escalations and increase the financing requirement.
How does it work?
The guarantor gives a guarantee to the financier, on payment of a fee, that the film will be completed as per the schedule that is agreed upon. If there is a project overrun, the guarantor can take suitable action to protect his and the financiers’ interests. The guarantor would have entered into an agreement with the producer that would detail the commitments and liabilities of the producer towards the production and completion
schedule for the film.
Is it prevalent in India?
Since the concept of film financing itself is new in the country, completion guarantees are not really resorted to. But increasingly formal sources of finance are funding Indian films and completion guarantees will become a common thing in some years.
Courtesy - Televion Point
Monday, February 23, 2009
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