Oct 2, 2020

 The Brazilian Development Bank (BNDES) has already approved six operations of the emergency support line of the Audiovisual Sector Fund. In all, they will finance up to R$ 125.26 million for companies to pay the salaries of more than 2,300 employees and the expenses with about 630 suppliers, in addition to contributing to maintain their activities in 69 cities, in all regions of the country. In return for financing, companies are unable to dismiss employees for two months. Financial support also has an incentive to maintain employment in the next 12 months, by reducing financing rates by up to 88% for companies that preserve their staff.

The support will benefit the companies Praia de Belas (GNC Cinemas), with R$ 20 million; Tatu Filmes (Cine Show), with R$ 10.56 million; Cinemas São Luiz (Severiano Ribeiro Group, also responsible for the Kinoplex brand), with R$ 20 million; Redecine (Cinesystem), with R$ 40 million; Delta Filmes (Cineart), with R$ 20 million; and Arcoplex, with R$ 14.7 million – all with their movie theaters closed since March. It is expected that the resources can help companies to go through the current crisis and for jobs in the audiovisual sector to suffer as little as possible. 

The emergency line complements the temporary suspension of previous BNDES financing taken by five of the six supported groups. They operate in one of the sectors most affected by the crisis and which still does not show the first signs of economic recovery.

Petrônio Cançado, managing director of Credit and Guarantee Division of BNDES, highlighted that “BNDES has been working quickly and diligently to support the sector, deeply affected by the pandemic.” “Just over a month after the launch of the FSA Emergency Support, we approved the first operations,” he stated. 

“Only 8% of Brazilian municipalities have movie theaters. This BNDES support contributes to maintain not only economic activities, but also access to culture, including in regions far from large urban centers,” said Ricardo Rivera, head of the Telecom, IT and Creative Economy Department, who also stressed that support “will be important to help producers and distributors hold talent during the crisis.”

“We are a 103-year-old company and we have been through many difficult times, but the current moment is unprecedented,” explained Luiz Severiano, of the Severiano Ribeiro group, responsible for Kinoplex cinemas. “Without the help of BNDES and the Audiovisual Sector Fund (FSA), we would not be able to overcome it,” he added.

“The emergency financing line with FSA resources, operated by BNDES, was essential and fundamental to ensure the survival of our business,” said Eduardo Difini Leite, director of GNC Cinemas, who highlighted BNDES’s promptness. “The swift analysis and approval, after the managing committee’s approval, show the sense of urgency and professionalism of this institution, at this unprecedented moment experienced by our sector, with cinemas closed for more than half a year,” he added.

Support for the audiovisual sector is yet another emergency measure to face the effects of the Covid-19 pandemic. In all, BNDES’s emergency actions have benefited more than 232,000 enterprises and contributed to securing 7.7 million jobs.

FSA – Created in 2006, the FSA is intended for the development of the entire audiovisual sector in Brazil. To this end, it relies on resources generated by the sector’s own economic activity.

Launched in July, FSA’s emergency credit line was approved by the FSA Managing Committee and aims to support the sector that has been severely impacted by the Covid-19 pandemic.  It has R$ 400 million, which will be allocated to maintain jobs and the sector’s production chain of the. Of this total, R$ 250 million can be accessed by direct operations with BNDES – in financing greater than R$ 10 million –, being complemented by the Regional Development Bank of the Extreme South (BRDE), which facilitates operations below R$10 million.

Resources can be used exclusively to finance costs with salaries, suppliers and fixed operating expenses and must be applied within 12 months. The financial cost is TR (which is currently at zero) plus 4% per year. If the borrowing company meets contractual goals for maintenance, replacement or expansion of jobs over 12 months, it will be entitled to a reduced financial cost, of TR plus 0.5% per year. The loan has a 24-month grace period and a total payment period of up to eight years – the longest of all emergency credit lines launched by BNDES since the beginning of the pandemic.

About BNDES

Founded in 1952 and currently linked to the Ministry of Economy, BNDES is the main instrument of the Federal Government to promote long-term investments in the Brazilian economy. Its actions focus on the socioenvironmental and economic impact in Brazil. BNDES offers special conditions for micro-, small- and medium-sized enterprises, as well as social investment lines, directed at education and health, family agriculture, sanitation and urban transport. In crisis situations, BNDES acts in an anticyclical manner and assists in formulating solutions for resuming economic growth.