Financier begins attempt to fund films through IPOs. (Media & Technology).

Civilian Pictures Inc., a Los Angeles-based film financing company, plans to arrange the sale of as much as $50 million in shares for seven companies that want to finance motion pictures through initial public offerings.

Civilian Pictures is underwriting the $7.9 million IPO of Billy Dead Inc., whose executive producer is actor Etban Hawke.

Civilian plans to help manage the initial stock sales of six other film production companies through by the end of 2004, said Civilian Pictures Chief Executive Barry Poltermann.

'We're optimistic the market will be more receptive than a year or two ago" to a film-based IPO, Poltermann said. "The malaise in the market seems to be clearing."

More companies are considering share sales following the 25 percent gain in the Standard & Poor's 500 Index since March 11. Increased investor appetite for IPOs is evident in the sale of almost $2 billion of initial share sales in the last week of June and the first day of July by American Financial Realty Trust, Axis Capital Holdings Ltd., Maguire Properties Inc. and Molina Healthcare Inc.

Seven U.S. companies raised $2.42 billion in initial public offerings in the second quarter, up from $513 million in the first quarter, according to Bloomberg data. Still, that's less than half the $5.5 billion raised by 35 companies in the second quarter of 2002.

'Snowball's chance'

Porter Bibb, a managing partner at Mediatech Capital Partners LLC, said there's little chance Civilian Pictures will be able to sell a film IPO.

Billy Dead's IPO "doesn't have a snow-ball's chance," said Bibb, whose New York-based company acts as an investor or an adviser to media and technology companies. "Why would people invest in a company with no history at all in film production or earnings?"

Films are usually financed by major Hollywood studios such as Walt Disney Co. or Vivendi Universal SA, which sell the film's distribution rights or get banks to lend money backed by collateral that is usually a combination of the studio's assets.

"Billy Dead," a murder mystery that portrays a troubled working class Michigan family, plans to sell 900,000 shares at $8.75 each, according to the film's Web site. The stock would trade on the Over the Counter Bulletin Board.

Billy Dead intends to manage the film's production and license distribution rights worldwide before dissolving the company and distributing the assets in cash to shareholders, the film's prospectus said.

An investor who buys "Billy Dead" stock will be issued preferred shares that will have limited voting rights. The founders, management and board of Billy Dead will have control of the voting stock of the company.

Billy Dead, formed in September, has generated no revenues in the three months to March and had a net loss of $28,205, according to its prospectus. Hawke, who may play a lead character in the film, didn't reply to an e-mail sent through Civilian Pictures.

Peter McDonnell, 47, started Civilian Capital at the end of 2000. He worked at now defunct Drexel Buraham Lambert Inc. for six years before starting as a futures and options broker at McDonnell Inc. in 1985.

"We thought the film industry needed a kick in the pants," said McDonnell via telephone, adding that actress Diane Keaton and former Paramount Pictures President David. Kirkpatrick are Civilian Capital advisers.

Poltermann, 39, was an independent film producer who helped make a vampire horror movie, "Aswang," in 1994. In 1999, a documentary he helped produce, "American Movie," won the Grand Jury Prize at the Sundance Film festival.

Each of Civilian Pictures-backed films will have its own chief executive officer, chief financial officer and board members who will distribute any profits to shareholders, possibly through dividends, Poltermann said.

"We don't want to do any more offerings until we've done the first offering," he said.

Lisa Wolfson contributed to this story.