Sumner Redstone’s family holding company National Amusements today issued a statement that doesn’t tell us much about the company’s movie theater asset sales (bids were due Friday) but assures that the company did indeed reach a debt repayment schedule. The company “announced that it has restructured its existing indebtedness on the terms previously announced by entering into definitive agreements with its creditors. The agreements extend the maturity of National Amusements’ existing debt to December 31, 2010, with certain repayments due in late 2009 and in 2010. Pursuant to the agreements, National Amusements has pledged substantially all of its assets to secure the restructured indebtedness. National Amusements is permitted to satisfy the requirements to repay the restructured indebtedness with cash flow from its operations, tax refunds and the sale of assets, all as determined by National Amusements.”
The 85-year-old Viacom chief still has a $1.4 billion balance left on his original $1.6B loan, some of which has to be paid back by the end of this year, and all in 2010. This crisis began back in October when Viacom and CBS share prices dropped 43% and 52% respectively, causing the old coot to sell stock in both companies worth $233 million. The falling prices put Redstone in violation of debt covenants, forcing him into negotiations with creditors. Because of how hard he was hit by the stock market crash, Redstone’s personal wealth dropped from nearly $7B to barely $1B.
There’s not much new to report on the asset sales other than sources tell me the UK bids are in “and the company is pleased with those” and the U.S. bids are due any minute. To pay down his debt, Redstone is hawking chunks of his Massachusetts-based National Amusements’ theater chains which include more than 1,500 motion picture screens in the U.S., UK, Latin America and Russia. Citigroup, which is handling the auction, sent out sales books to 60 parties for the domestic theaters except the 17 in New England (which are not on the block presumably for sentimental reasons since that’s where the company started), and to 20 parties for the overseas theaters in the UK and South America. At one point, sources told me he received 60 offers for the U.S. theaters and 20 offers for the UK and South American, and even an offer for the Russian theaters which weren’t on the block — yet.