Zazen, Lereby raising $60 mil for 10 films

RIO DE JANEIRO -- Jose Padilha, director of "Elite Squad: The Enemy Within" is teaming via his Zazen Prods. label with Daniel Filho's Lereby Prods. to raise $60 million to finance 10 Brazilian movies over the next four years. A private equity fund, to which the partners are putting the finishing touches, will account for about $30 million, Padilha said during the Rio Festival. The fund is backed by Brazilian investors. Brazil's battery of film tax shelters will supply the other $30 million, Padilha added. Movies will target Brazil as their primary market. All will be released in Brazil via Nossa Distribuidora, the groundbreaking new distrib op announced Tuesday at the Rio Fest whose founding partners include Zazen and Lereby, plus Fernando Meirelles' 02 Filmes, Conspiracao Films, Morena Films, FL & MAM Participacoes and Vinny Films. The production drive, Padilha said, "will help Nossa to work. We need to create a volume of films so that Nossa has leverage to book movies with exhibitors." Slate's first titles will be announced in the next few weeks, Padilha said. One early production will, however, be a biopic on Rickson Gracie, the undefeated Mixed Martial Arts champ. Most movies will be in Portuguese. Brazilian directors will helm all of them. Zazen and Lereby will produce around three movies each. The rest will be co-productions with third-party companies. Receiving an average $6 million investment per pic, part of which will also cover P & A costs for Brazil, the productions look to be higher-end but not astronomical for Brazil, where blockbuster "Elite Squad: the Enemy Within" -- the highest-grossing pic in Brazil ever -- cost $10 million. "Part financed by an equity fund, the slate has to be diversified - mixing romantic comedies, action movies, dramas -- making investment safe but offering good upside possibility," Padilha said. Padilha argued Zazen and Lereby would not have been able to mount the equity fund without Nossa. As a distribution service company, Nossa allows B.O. revenues to go straight to producers who pay Nossa a distribution fee and retain distribution rights to their productions. "Via Nossa the revenues for producers are five-to-ten-times higher," Padilha said. Nossa is modelled on Padilha's direct distribution for "Elite Squad: the Enemy Within." "I've tried ten times to raise private equity money to make productions in a traditional way. Nobody wanted to look at it," said Padilha. "As soon as we did direct distribution on 'Elite Squad 2' and announced Nossa, everybody wants to do it." Contact the Variety newsroom at news@variety.com