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MONTREAL -- Alliance Films, Canada's leading film distributor, has paid all of its approximately $400 million debt, putting it in a stronger position to pounce on new films and ink output deals.

The transaction was approved by the board of directors and by its shareholders, the Quebec government investment arm Societe Generale de Financement du Quebec and GS Capital Partners, a subsidiary of Goldman Sachs.

It is estimated that Montreal-based Alliance bought the debt for around 75 cents on the dollar.

"Alliance has taken significant steps since its privatization to solidify its position as a world-class distributor of motion pictures," chairman Victor Loewy said in a statement. "We are in a very strong position to further fund growth and deploy capital opportunistically at a time when our industry faces unprecedented financial challenges."

The deal will allow the company to expand in Europe, where it already owns Momentum Pictures in the U.K. and Aurum in Spain. However, it has dropped plans to buy French distrib TF1 Intl.

In Canada, Alliance is facing a much more competitive market thanks to the arrival of the aggressive Entertainment One and the expanding Maple Pictures, which now reps Miramax.