Yahoo Finance Question Time production company saved by rescue deal
One of the UK's biggest TV production companies behind Question Time and Premier League coverage on BT Sport and Amazon has won a rescue deal saving 650 jobs after being battered by the pandemic.
Tinopolis was on the brink of running out of cash as it grappled with the production sector's widespread shutdown due to Covid.
The company that also produces Crufts coverage for Channel 4 has now agreed terms with lenders that will inject fresh capital into the business, but wipe out more than £100m in loans owed to executives and former managers.
Lenders HSBC, First Nations Bank of Canada, Blackrock and Pemberton Asset Management will defer debt repayments and plough £10m into Tinopolis through a restructure.
Management will also invest more than £250,000 and provide additional loans to maintain majority ownership through a new company, Tinopolis Group Limited.
A subsidiary business carrying the loan notes between the company and both current and former managers has been put into liquidation after lenders refused to guarantee the funds.
Founder and chairman Ron Jones said the firm was almost "uniquely punished by the pandemic" because of its heavy reliance on sport.
"We would have run out of cash by now without the support of the lenders," he added. "In this industry you get your money quite early on in contracts, so for a period last year we had good cash balances. But once you begin to implement those projects as Covid restrictions relax, you start spending that money at an alarming rate."
Tinopolis was left stung by pandemic following the hiatus in live sport and lockdown restrictions that delayed productions in Britain and America.
About 20 staff were axed in an effort to curb costs during the crisis, while work with its 18,000-strong bank of freelancers was cut back.
The British Film Institute found that the amount spent on producing TV and films in Britain last year dropped by more than a fifth to £2.8bn as the pandemic took its toll.
Tinopolis also has a distribution arm and 13 production companies with bases in London, Los Angeles, Glasgow, Cardiff and Llanelli, Wales.
Its shows span Traffic Cops to BT Sport and Amazon's Premier League and rugby coverage, as well as Sky Sports live broadcasting of the ICC Cricket World Cup.
More than half its revenues come from the US, where it produces American Ninja Warrior for NBC and the Netflix cookery series Nailed it!
Before the pandemic struck, revenues at Tinopolis rose by a fifth to £271.9m for the year to September 2019, while pre-tax profits fell 90pc to £1.8m. It was reportedly worth up to £300m in 2017.
Mr Jones said rebuilding the financial strength of the company was now "dependent on Covid being defeated".
"We can live with that for a while because we are not losing money on these contracts, but we are not making huge amounts of money on them either," he added.
"The recapitalisation has meant that as long as we can keep our business stable and not lose contracts, then we will be fine."
The Tinopolis management team bought out a significant stake held by the buy-out fund Vitruvian Partners in October 2017.
It held talks three years ago over a sale to Sony Pictures or the French entertainment group Lagardere, but neither led to a formal offer.
