MUMBAI: Peace Arch Entertainment Group Inc. has sold all shares of its North American home entertainment operations to Phase 4 Films Inc., a new entity to be led by current Peace Arch Home Entertainment president Berry Meyerowitz.

The transaction includes the sale of all of Peace Arch’s home entertainment operations in the United States and Canada, including Peace Arch’s 50 per cent interest in Peace Arch Home Entertainment, LLC, a 50/50 joint venture between Peace Arch and Content film Plc.

Under the terms of the agreement, Phase 4 assumes approximately $7.75 million of debt currently owed by Peace Arch and its subsidiaries to various parties and relieves Peace Arch of a loan guaranty of $2.95 million. Peace Arch also becomes an 8.8 per cent shareholder in Phase 4, with whom it has entered into a long-term distribution agreement.

"The sale of our Home Entertainment division allows Peace Arch to focus on its core businesses of high quality television production and motion picture licensing while at the same time cutting our overhead, reducing our outstanding indebtedness and strengthening our balance sheet. Although Home Entertainment has been a major contributor to our revenues, the capital required to further grow this division did not align with our overall plans for reorganizing and rebuilding Peace Arch. Nonetheless, we believe that Berry and the Phase 4 team will be able to expand that business as a standalone operation, and we are pleased to be both a shareholder and a supplier of content to the new operation," said Peace Arch president and COO John Flock.

"I am thrilled with the opportunity to take these divisions to a new level, as a standalone company. We have secured the financing needed to grow our business, and our team is committed to becoming the leading independent distributor of filmed content in North America. We remain focused on delivering content via traditional channels as we also expand our business into digital distribution," said Phase 4 president and CEO Berry Meyerowitz.