MONTREAL – Alliance Communications Corp. has renegotiated its line of credit with the Royal Bank of Canada, and the Canadian bank has upped Alliance’s credit facility from C$75 million ($55 million) to C$122 million ($89 million). Alliance’s production line of credit remains stable at $36 million, but the Toronto-based entertainment company’s operating line of credit has been increased by $33 million.
Alliance will use part of the cash infusion to finance new acquisitions, though Alliance executives are not ready to say which companies Alliance is targeting for purchase. Alliance chief financial officer Roman Doroniuk confirmed persistent rumors that the Canadian company is set to make a bid for a British film production franchise funded by the national lottery in the U.K., and that it will also be setting up a domestic distribution operation in Britain. In addition, Alliance is on the verge of creating a distribution company in Australia.
Both new initiatives will be funded by the new Royal Bank credit line, and the startup costs for the U.K. and Australian companies will be in the range of $7 million in each territory, according to Doroniuk.
The credit facility is one of the largest ever for a Canadian film and TV producer, Doroniuk said, adding, “It’s very significant for planning and operating purposes. It gives the company a great deal of flexibility. We’re looking at a number of potential opportunities both here and abroad, and it gives us the ability to move more quickly. If a project comes along, we’re not constrained by a bank line that we’re constantly monitoring.”
Royal Bank of Canada VP Gerry Gartner said he hoped the credit facility would help cement longterm ties between the bank and Alliance.
“The size of the facility reflects our confidence in Alliance particularly, and the Canadian entertainment industry as a growth sector of our economy,” Gartner said.