Cinram repurchases debt

Company has one more year before losing tax advantages

TORONTO -- Canadian pre-recorded media maker and distributor Cinram International Income Fund has used the recession to buy back debt at a huge discount to its face value.

Toronto-based Cinram on Wednesday said it has completed the repurchase of $169.7 million in senior debt at a cost of $129.8 million.

The net proceeds of $39.9 million, less transaction costs, come in handy for Cinram as it continues cut debt and operating costs to deal with sliding sales of DVD units and other raw media product to Hollywood studios and other global customers in a volatile home entertainment market.

Cinram, like around another 165 domestic income trusts, also has one more year before it will lose tax advantages for investors under new rules set to be introduced by the federal government at the end of 2010.