In a Canadian first, Alliance Communications Corp. has established a credit line for $75 million Canadian ($53.7-million U.S.) with the Royal Bank of Canada.
Canada’s production companies were financed project by project until the major firms went public in 1993. The Royal Bank of Canada is, by far, the largest lender to the Canadian entertainment industry.
“It gives them easier and more timely access to capital,” one analyst said of the credit line. “Like any production company, these guys need cash and this gives them operating flexibility and allows them to get involved in projects with fewer hassles than another producer could.”
Toronto-based Alliance said it will use the funds for working capital, production financing and currency hedging. Although Alliance hasn’t played the currency markets much, “it makes sense to have money available to do that sort of thing,” said chief operating officer Gord Haines. Alliance does a lot of business outside of Canada, conducted mostly in U.S. dollars.
Alliance said its profit soared to $6.5 million for the nine months ended Dec. 31,1994, up from $3.6 million a year earlier.
Revenue climbed to $103.1 million from $57.5 million in the comparable period of 1993.