Following the resignation of two top executives and a heavy debt load, investment firm 3i probably will put Chorion up for auction, according to published reports from various sources.
Chorion's chairman Lord Alli and deputy chairman William Astor resigned after the business failed to renegotiate banking deals to alleviate its debts, the U.K.'s Guardian newspaper reported.
The debts were accrued by the company during 3i’s £111m buy-out in 2006, which was funded by £79.8 million from 3i and £7.4 million from Chorion management, with the rest funded by debt.
Chorion currently has a total of about £70 million in debt, and interest payments are likely to rise from £31m to £35m next year, becoming unmanageable for the company without a debt deal.
The Guardian suggests that Chorion is now likely to go to auction with a number of the same parties rumored to have been interested in Hit Entertainment such as Disney, Hasbro, Viacom and Saban Brands have expressed interest.
For the year ending March 10, Chorion reported revenues of £51.7m and EBITDA of £14.9m, up 11 percent on the previous year, according to the Financial Times.