Spanish state investment vehicle SETT and South Africa’s Known Associates Group are teaming on a major audiovisual venture in Spain, encompassing a Madrid-based production company and post-production studios in the Canary Islands and Basque Country.
SETT, the investment arm of Spain’s Ministry for Digital Transformation, will commit €12.7 million ($14.5 million) to two public-private ventures valued at a combined €25 million ($28.5 million).
The first operation will see SETT committing $10 million to Moonlighting Studios Spain, the local arm of South African production-services heavyweight Moonlighting Films. The company will receive a total capital injection of $20.5 million to establish a production base in Madrid focused on developing projects and creating intellectual property.
The Madrid venture is expected to produce 10 feature films and documentaries. Moonlighting has provided production services on major international titles including “Mufasa: The Lion King,” “Mad Max: Fury Road,” “The Woman King,” “Mission: Impossible – The Final Reckoning” and Netflix’s “Resident Evil” series.
A second transaction will see SETT invest $4.4 million to take a 49% stake in the Spanish division of South African post-production company The Refinery. The company will receive a $9.1 million capital injection and establish facilities in the Canary Islands and Basque Country, the two parts of Spain with the most muscular tax incentives for production.
The two sites will operate as an integrated post-production platform intended to retain more audiovisual work, spending and creative control in Spain rather than outsourcing those services abroad.
“We will continue this investment effort because it is very profitable for the country. The audiovisual industry is cultural; it is not only about the economic value and employment it generates,” Digital Transformation Minister Óscar López said.
Moonlighting and The Refinery are part of Known Associates Group, founded by Tshepiso Chikapa-Phiri, who serves as group CEO. Private capital for both ventures will come from South African investment holding company Sinobhukosi.
“This agreement with SETT marks a turning point for our company and for South Africa,” Chikapa-Phiri said, adding that Spain would provide a strategic platform for developing Spanish content with international reach and strengthening ties between the two countries.
As an outlying part of the European Union., the Canary Islands also offers a Special Zone (ZEC) corporate income tax of 4% and 7% VAT, compared to 25% and 21% in mainland Spain. KAG has initiated the procedure to set up in the Canary Islands’ ZEC Zone, with ZEC providing support to understand and analyse the Canary islands ecosystem, Pablo Hernández, ZEC executive president, told Variety.
The operations form part of the second phase of the E.U.-backed Spain Audiovisual Hub Plan. SETT has also supported the establishment of Mexico’s Ítaca Films in Madrid, U.K. company Good Films setting up at Alicante’s Ciudad de la Luz and VFX giant DNEG acquiring a significant equity position in the Canary Island’s Anima Kitchent.
John Hopewell contributed to this article.
Source: variety.com
