Montreal: Telescene Film Group has entered into a major action-adventure programming agreement with American partners and become the latest Canadian production company to go public with a $27 million ipo closing July 3.

The ipo, which was upped from $20 million based on strong demand, calls for the sale of 3 million class b subordinate voting shares, 2.6 million from treasury and 400,000 from the principal shareholders, president and ceo Robin Spry and executive vp and coo Paul Painter.

‘We’ve been working three years to position this company properly, as a well-capitalized independent corporation that will retain all of its rights, as much as is possible,’ says Painter.

In the preliminary prospectus, Telescene says it has entered into a partnership with u.s. independent producers Gary Goodman, Barry Rosen and Rich Melcombe to create the Action Adventure Network, a new venture which will supply programming to u.s. dbs service DirecTv.

The initial two-year agreement calls for the venture to provide 176 hours of action-adventure programming to DirecTv with a start-up air-date set for May ’98. The agreement calls for the production of four 2-hour tv movie pilots over two years with the option to produce an additional 20 1-hour episodes per movie.

Telescene has a 50% equity in the venture, which holds all other u.s. rights following a 30-day ppv window including cable, syndication and video. Telescene also retains Canadian rights and has first window on an adjusted gross receipts basis of all international rights, excluding presale and coproduction rights acquired by European partners.

In addition to the 3 million subordinate shares, the ipo’s underwriters, including co-leads Marleau, Lemire Securities and RBC Dominion Securities, have an over-allotment option of 260,000 shares.

Spry and Painter retain majority control of the company as the principal shareholders of the five to one Class a multiple-voting shares.

The selling price is $9 a share with net proceeds of $21.5 million.

The company has received its conditional tse and mse listings.

According to Painter, 65% of the stock is being sold to institutional investors, 35% to retail, with $14 million in proceeds intended for interim financing, $2 million for the acquisition of a production studio in Montreal, $1 million in development, talent and housekeeping rights and related costs expenditures, as well as other investments in the expansion of Telescene’s New York and Los Angeles operations.

Action Adventure

network

The prospectus says the programming approach of the Action Adventure network will be to select popular literary material as well as well known movie titles and join them with major motion picture directors and producers to provide original action/adventure programming of high quality in an hour-long format.

Goodman/Rosen Productions is presently shooting Police Academy: the Series in Toronto. Richmel Productions, Melcombe’s company, produces sitcoms, mows and specials for a wide range of u.s. tv networks and studios.

Adopting a strategy of controlling financing and production, Telescene and u.k. production partners have successfully delivered three four-hour miniseries based on the Jack Higgins novels to Showtime, as well as the 22 half-hour drama anthology The Hunger, which premiers as a movie trilogy July 20 also on Showtime. The Hunger had an upscale budget of $24 million and was coventured with Tony and Ridley Scott’s u.k.-based house. An additonal four hours (two 2-hour cable movies) based on the Higgins series is lated for production in 1997/98.

Production is underway in Montreal on 25 additional half-hour episodes of the young teen sitcom Student Bodies, budgeted in the $600,000 per range and syndicated in the u.s. by Twentieth Television.

Telescene had top-line revenues, including library revenues, of more than $22.7 million for the year (’97) ending Feb. 28, $31.8 million for ’96, with $59.6 million projected for fiscal 1997/98.

According to the prospectus, the ’98 forecast includes $42.5 million in production revenues, excluding revenues from the Action Adventure Network, an ebitda in the order of $6.2 million and projected net earnings of $3.8 million.

Telescene is in preproduction on the feature film Going to Kansas City, the first Canadian coproduction with Finland. Distributors on the $3.4 million production include Mandart Entertainment and Park Entertainment.

The ipo selling group also includes Midland Walwyn Capital, Griffiths McBurney & Partners and Gordon Capital Corp.