EXHIBIT 99.2
NEWS ANNOUNCEMENT
[LETTERHEAD]
FOR IMMEDIATE RELEASE:
CINERGI PICTURES ENTERTAINMENT ANNOUNCES
CONSIDERATION OF FUTURE PLANS
Santa Monica, CA, (April 3, 1997) - Cinergi Pictures Entertainment Inc.. (CINE:
Nasdaq) which in a separate announcement today reported that it has entered into
an agreement to sell substantially all of the films in its film library to Walt
Disney Pictures and Television, also announced that it does not presently intend
to commence production on any additional motion pictures (although the agreement
with Disney does not preclude Cinergi, pending consummation of the sale, from
commencing production on films that would not be distributed by Disney) and that
it is in the process of considering its alternatives assuming consummation of
the library sale to Disney. Such alternatives include disposing of those assets
which are not being sold to Disney, in one or a series of transactions.
In connection therewith, Cinergi is presently in discussions regarding the
potential sale of a substantial portion of the assets that would remain after
the film library sale to Disney. Not included in the sale to Disney are
Cinergi's slate of approximately forty development projects, Cinergi's visual
effects facility, and Cinergi's rights in DIE HARD, WITH A VENGEANCE (which
Cinergi owns with Twentieth Century Fox which controls the sequel rights to the
film). Cinergi is entitled to significant overages from Twentieth Century Fox
with respect to those territories and media (including the United States, Canada
and Japan) for which Fox controls distribution rights. Cinergi controls
distribution rights to DIE HARD, WITH A VENGEANCE in certain international
territories. Cinergi has previously granted Disney distribution rights to the
film in a portion of those territories and, in connection with the agreement
with Disney
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CINERGI PICTURES ENTERTAINMENT INC., 4/3/97 PAGE 2
announced today, Cinergi has agreed to relinquish overages payable by Disney
with respect thereto.
Also not included in the sale to Disney are any rights with respect to the film
BROADWAY BRAWLER on which production ceased after commencement of principal
photography. Cinergi is currently in discussions with certain parties involved
in the production of BROADWAY BRAWLER regarding settlement of various
obligations in connection therewith including, among other things, debt incurred
under Cinergi's credit facility in connection with production of the film and
advances received from Disney as part of funding production (repayment of which
is guaranteed in both cases by the completion guarantor for the film), as well
as other commitments made in connection with production of the film. Cinergi
anticipates that no significant amounts will be outstanding under its credit
facility after payment of the debt relating to BROADWAY BRAWLER and assumption
by Disney, in accordance with the agreement announced today, of the debt
relating to AN ALAN SMITHEE FILM.
Cinergi's announcement and the execution of the agreement with Disney follows a
year long strategic review initiated by Cinergi to assess its goals and business
strategies in the context of, among other things, the continuing increase in
motion picture production and releasing costs, an increased number of motion
pictures released by motion picture companies domestically, the development
projects available in the marketplace, and Cinergi's financial capabilities.
The financial advisory firm of Jefferson Capital Group, Ltd. assisted Cinergi in
its strategic review, which included discussions with other parties regarding
the sale of an interest in Cinergi or of the entire company.
Cinergi currently anticipates that any decision made regarding its alternatives
assuming consummation of the film library sale to Disney, will effectively
result, after provision for Cinergi's remaining liabilities, in a cash payment
to Cinergi's stockholders in exchange for their equity interests in Cinergi.
The foregoing constitutes a forward-looking statement. Certain factors could
cause actual events to be different from those set forth in the forward-
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CINERGI PICTURES ENTERTAINMENT INC., 4/3/97 PAGE 3
looking statement. No assurance can be given that the film library sale to
Disney or any additional transactions will be consummated or that a cash
payment of any type will be made to Cinergi's stockholders and no assurances
can be given as to the amount of any cash payment, if made. No agreements
have been entered into or record date set with respect to any additional
transactions, and any such transaction or series of transactions would be
subject to, among other things, consummation of the film library sale to
Disney and receipt of applicable, including stockholder, approvals. Assuming
consummation of the film library sale to Disney and receipt of all applicable
approvals with respect to any additional transactions, the amount of any
payment to Cinergi's stockholders would depend upon, among other things, the
terms of such additional transactions (including any transactions to dispose
of Cinergi's remaining assets) and the provisions made to satisfy Cinergi's
remaining liabilities. Cinergi does not anticipate that any payment will be
made to Cinergi's stockholders until at least the third or fourth quarter of
1997. Such statement constitutes a forward-looking statement, and any such
payment could be significantly delayed depending upon, among other things,
the form of any additional transactions and the time required to obtain any
necessary approvals. Any such delay could reduce the amount of the payment
ultimately to be made to Cinergi's stockholders.
Cinergi Pictures Entertainment Inc., founded in 1989, is an independent
producer and distributor of motion pictures which are distributed in all
domestic and international theatrical and ancillary markets, including home
video, cable and broadcast television.
This press release includes forward-looking statements that involve risks and
uncertainties. Certain factors may cause actual events to differ materially
from those contained in the forward looking statements. No assurances can be
given that the film library sale to Disney or any additional sale of assets or
other transactions will be consummated, that the obligations with respect to
Broadway Brawler will be settled, settled promptly or settled without material
adverse effect on Cinergi, that all amounts will be paid off under Cinergi's
credit facility, or that any cash payment will be made to Cinergi's stockholders
(or when such payment will be made or the amount thereof). Cinergi and its
operations are also subject to the risks and uncertainties described in
Cinergi's reports filed from time to time with the Securities and Exchange
Commission.
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