MONTREAL — Leading Canadian distrib Alliance Films is set to buy back $400 million of its debt at a discount — likely in the range of 75¢ on the dollar — putting the Montreal-based company in a much stronger financial position.

“The current market environment has presented Alliance Films with a unique opportunity to negotiate the repurchase of our outstanding debt,” said Alliance Films chairman Victor Loewy in a statement: “By opportunistically strengthening our balance sheet, we can become strategically more relevant and positioned for growth.”

The upbeat news comes a few weeks after Moody’s Investors Service downgraded the Canuck distrib’s credit rating to reflect Alliance’s “high leverage, weak liquidity and risk associated with film quality and contract renewal.”

Alliance execs were not commenting Wednesday, but when Moody’s rating was announced in mid-October, prexy Charles Layton said the company’s financial picture was rosy and that the company was on a box office roll, with a number of hits this year, including “Sex and the City” and “Journey to the Center of the Earth.”

It is expected that the deal to buy back the debt will be concluded by the end of this month. The company is jointly owned by Goldman Sachs and provincial government investment arm the Societe Generale de Financement du Quebec.

The added financing will be used to pump more coin into Alliance’s European operations. At the moment, Alliance is active in both the U.K. via Momentum Pictures and in Spain via Aurum, but execs have confirmed that the company is looking at the possibility of entering the distribution biz in France.