Chorion chairman exits, fuelling talk of sale

Lord Waheed Alli, the chairman of UK IP rights company Chorion has resigned together with deputy chairman William Astor after reportedly failing to renegotiate the firm’s debts.

A spokesman for Chorion today confirmed that Alli and Astor have tendered their resignations with immediate effect, but could provide no further comment on a report in the Financial Times linking their departures to ongoing financial travails.

Chorion – which counts the Mr Men, Noddy, Olivia, Octonauts and Max & Ruby among its children’s titles – attempted to take over rival rights holder Hit Entertainment last year but was unable to secure the necessary financial backing.

The company attempted to offload its literary arm – home to the estates of Agatha Christie, Raymond Chandler and others – two years ago to Coolabi, but in that instance Coolabi was unable to come up with the cash.

According to the FT, Chorion is wrestling with the debt burdens it took on after it was sold to private equity firm 3i in 2006 for £111m (US$181.7m). 3i’s investors put in £79.8m while Chorion management contributed £7.4m. The rest was funded by debt. Chorion currently has a total debt of about £70m, the paper said.

The company reported an 11% rise in earnings before interest, tax, depreciation and amortisation to £14.9m for the year to March 2010. Revenues were £51.7m.

Speculation now surrounds Chorion’s future, with an auction possibly on the cards. Disney, Mattel and Japanese IP firm D-Rights have all been linked to a bid for Thomas the Tank Engine owner Hit, while Entertainment One, Viacom, Hasbro and Saban are all thought to have dropped out of the running.

All parties will now, however, likely cast their eyes over Chorion, while Alli has reportedly been trying to put together his own buy-out. C21 understands that Alli planned a bid for Hit last year but 3i refused to give him the backing to do it until he sorted Chorion’s own finances.