MONTREAL — Canadian film and TV producer Paragon Entertainment Corp. reported a major loss for the nine-month period ended Dec. 31, 1997. It also announced that the company has run into difficulty with its lenders.
In a prepared statement, Paragon chairman and CEO Jon Slan said, “These operating and financial results indicate that Paragon is not in full compliance with covenants it has made to lenders in conjunction with its financing activities. Management is in discussions with its lenders regarding these matters.”
Slan was not available to elaborate on the state of the company’s finances.
Paragon, which owns Handmade Films of London, has previously announced that it is seeking a strategic partner or company interested in purchasing all or part of Paragon. Late last year, Paragon engaged Yorkton Securities to attempt to find a potential buyer or partner for the company.
Paragon reported a loss of C$12.9 million ($9 million) or 53¢ per share for the nine months, compared to net earnings of $418,000 (3¢) for the same period the previous year. A total of $6.6 million of the loss was due to a reserve taken against the carrying value of completed programs. Another $1.2 million of the loss is related to the ongoing difficulties reported earlier this year with respect to Paragon’s investment in Lacewood Prods., the Ottawa-based animation producer that Paragon took over last year.
In his prepared statement, Paragon topper Slan suggested Handmade would likely be adding to the company’s bottom-line in coming weeks thanks to three pics in post-production.