Vancouver: Struggling Peace Arch Entertainment of Vancouver has a new CEO after a stock-swap deal to acquire a Toronto film and television producer.

In the deal, effective Dec. 20 and subject to approvals, Gary Howsam will take over the helm of Peace Arch after the West Coast company acquired the shares and assets of GFT Entertainment, a division of CPC Communications. Peace Arch issued 8.3 million Class B shares worth $2.5 million (at $0.30 per share) to seal the deal.

Former CEO Juliet Jones will remain with Peace Arch through a ‘transition period,’ with her future role not yet defined.

Peace Arch will also reconstitute its board to include members with more motion picture production experience – an apparent shift from the company’s sole focus on production of television such as series First Wave and Big Sound.

To boost cash flow, the merged company has also issued, through a $1.5-million private placement, five million Class B shares (valued at $0.30 per share) to four unrelated and undisclosed investors.

The proceeds are intended to be used for general working capital for the combined operations of Peace Arch and its new assets.

And deals with major creditors also free up the merged company somewhat. Fremantle Media, owed $7.6 million, can convert its debt, currently secured through Peace Arch’s income streams, to Class B shares in 2005 at a minimum of $3 per share. Comerica Bank California, meanwhile, has released Peace Arch from its loan guarantee of $1.8 million and can also convert remaining debt to Class B shares starting in 2006 at a price of $5 per share.

On Dec. 20, Peace Arch’s Class A shares traded at $0.50 per share on the TSE compared to their year high of $1.30 and low or $0.15. At press time, Class B shares last traded at $0.25 per share on Dec. 18 compared to the 52-week high of $1.25 per share and low of $0.15 per share.

-www.peacearch.net

-www.gfte.com