PRESS RELEASE
Intertainment AG creates a solid basis for the future
Shareholders' meeting decides on increasing authorised capital
Ismaning near Munich, 27 June 2001 - Despite the pending lawsuit with Franchise Pictures,
Intertainment AG of Ismaning near Munich, has no worries about the future. This was emphasised
by the chairman of the managing board, Rüdiger Baeres, at the shareholders' meeting of the
media company in Munich. New sources of turnover are already definite. This includes the
contract with the Hollywood star producer, Arnold Kopelson, and the long-term planned
involvement with SightSound Technologies Inc., a strategic holding (just 25 percent), which
owns the innovative patents for downloading films and music.
Intertainment filed a complaint against the US production company, Franchise Pictures, at the
end of 2000, because of fraudulently excessive budget. A decision in the legal dispute is still
to be expected. The claim for films purchased hitherto amounts to approximately 20 million US
Dollars. "Since autumn 2000, Intertainment has not purchased any more films from
Franchise, a fact which is shown both in the balance sheet for the year 2000 and increasingly
in the figures for the first months of the current financial year", Baeres explained. In
the first quarter of 2001 the company achieved turnover amounting to 9.6 million DM/4.9 million
euros (first quarter of 2000: 65.4 million DM/33.4 million euros). Baeres described a
cross-action by Franchise as "insubstantial".
There are two possible variations for business development in 2001. If Intertainment should
obtain the franchise films at actual prices and also be reimbursed for the 20 million US
Dollars paid in excess, turnover of 315 million DM and tripling of the results for normal
business activities to approximately 60 million DM are anticipated. Without reimbursement and a
safety margin of reduction for the delayed assessment of the films, profit would be 20 million
DM with the same turnover. "In the event of a settlement, turnover could turn out lower,
but profit will be above 20 million DM", said Baeres. "In view of the legal dispute
with Franchise, our interest in further co-operation is low, of course. It is difficult to
imagine being able to trust such a partner again."
The projects with the producer, Arnold Kopelson, are not prejudiced by the dispute with
Franchise. The first film shall reach the cinemas in 2002. Moreover, at the start of the year
it was possible to conclude a contract with Paramount Pictures - one of the leading studios in
Hollywood. Paramount is thereby co-producer of Intertainment for the Kopelson films and bears
one part of the development and production costs. In the frame of the co-operation with Arnold
Kopelson, 3.8 million DM was paid out in the first quarter of 2001.
The proposal to increase the authorised capital by a further 4.3 million euros was put to the
shareholders' meeting. "As yet there are still no plans to increase the share capital",
Rüdiger Baeres stressed. "However, our aim is to keep ourselves open to all options for
further growth."
Contact:
Intertainment Aktiengesellschaft
Marietta Birner
Osterfeldstraße 84
85737 Ismaning
Telephone: 0 89 / 216 99 - 211
Fax: 0 89 / 216 99 - 11
Internet: www.intertainment.de
E-Mail: investor@intertainment.de