Montreal: Telescene Film Group, operating on the edge as it files for protection under the Bankruptcy and Insolvency Act, has reported net losses of $29.6 million for the third quarter ending Nov. 30, including a $23.7-million write-down in projected library sales. Foreign sales were affected by the crisis, and further revisions of the company’s assets and liabilities may be necessary.

The results were released Feb. 13, two full weeks after they were due, resulting in a temporary cease trading order issued by the Ontario Securities Commission. Telescene cfo Daniel Proulx said the osc order would likely be lifted once the financials were filed.

Unable to find a buyer or build a significant strategic and financial alliance, and in debt to secured creditors, primarily two banks, for more than $80 million, tfg.b stock price has fallen down the charts. It was trading at $0.14 on Feb. 7 when the cease trading order was issued. The 52-week high/low is $6.50/$0.03.

The removal of the cease trading order is clearly in the interests of frustrated tfg.b shareholders, who otherwise have no options and no markets as long as the order remains in force.

A spokesperson for the osc says the order is a consequence of "failure to file third quarter interim financials." A hearing is set for Monday, Feb. 19.

Telescene reported gross revenues in Q3 of $13.8 million, compared to $24.2 million for the same period in ’99. Library revenues dropped markedly to $300,000 compared to $6.5 million last year.

The high cost of sales in the quarter includes $13.3 million of amortization of new product deliveries, 30 half-hours of tv, $1.8 million in distribution costs and the $23.7 write-down against the library.

Consolidated nine-month totals include $87.7 million in net losses on $27.3 million in revenues, the latter compared to $47.2 million for the same period in ’99.

Proulx says the delay wasn’t only caused by the reduction in manpower resources at the company but "was also to make sure we have a good understanding of what is going on and [to ensure] the representation is clear."

Montreal-based CineGroupe and Telescene have until the end of this month to finalize an agreement to create a live-action, joint-venture production company, 80% owned and managed by CineGroupe. The proposal is aimed at countering an even sharper devaluation of Telescene’s program library and loss of its development investment. The proposal has to be approved by creditors. *

-www.telescene.ca

-www.cinegroupe.com