It would make the Bob Simonds-run indie studio the first to take Saudi money since the murder of Washington Post columnist Jamal Khashoggi in October.
Following a string of box-office duds, STX Entertainment will shore up its cashflow with an investment from Saudi Arabia.a deal between the country’s Public Investment Fund and STX is nearly complete. That would make the Bob Simonds-run indie studio the first to take Saudi money since the murder ofcolumnist Jamal Khashoggi in October. As reports swirled implicating the Saudi government, WME decided to extricate itself from a $400 million Saudi investment made months earlier.
“The company has been very mediocre,” says MKM Partners' Eric Handler. “If you’re a new company, you need successful films to build the value of your catalog so you have future cash flow streams to support your frontline business. For every hit, they had multiple misses.” As the money began running out, STX stopped renewing executive contracts and quietly shut down its much-touted VR division. Simonds began looking for fresh investment, financial sources say, and was looking for someone to partner with Fogelson as a co-chairman. But that plan faltered as STX’s syndicate of senior lenders started to mull plans to sell their positions down to new lenders, potentially at a discount, sources say.
Initially, STX returned to China seeking equity investment, but after it received no takers, sources say the company began offering debt . Hony Capital, one of STX's core equity investors, was unwilling to guarantee the debt, however, and none of the prospective parties took them up on the offer .
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