Turning the current credit crunch to its advantage, Alliance Films intends to use its own cash to buy back debt at a discount.

‘The current market environment has presented Alliance Films with a unique opportunity to negotiate the repurchase of our outstanding debt,’ said Victor Loewy, chairman of the indie distributor, on Wednesday.

Last month’s downgrade by Moody’s Investors Service, which followed a cash injection in Alliance by majority investor the Société générale de financement du Québec, has had the effect of making the distributor’s bank debt cheaper in secondary markets.

So Alliance intends to repurchase an estimated $400 million in debt below face value — likely by between 10% and 25%.

Since Goldman Sachs & Co. acquired Alliance Films last year as part of its larger purchase of Alliance Atlantis Communications, the indie distributor has worked to strengthen its balance sheet.

The debt refinancing, besides enabling Alliance to cut its interest charges and boost its profitability, could also help the company release its upcoming film slate and continue on an acquisition trail in Europe.

‘By opportunistically strengthening our balance sheet, we can become strategically more relevant and positioned for growth,’ Loewy said.

On the strength of new output deals, Alliance intends to next year release 69 films theatrically in Canada and another 32 films in Britain and Spain.

Rival Entertainment One has also sought to exploit the current market turmoil by buying up smaller Canadian media companies, including Barna-Alper Productions and Blueprint Entertainment, eager to find scale and financing in lean times.