National Amusements Reaches Deal With Lenders, Won’t Sell ViacomCBS Stock Or Pledge Additional Shares

Showcase Cinemas
National Amusement's Showcase Cinema: NAI amends agreement with banks. Adam Glanzman/AP/Shutterstock

The Redstone family holding company National Amusements (NAI) said it’s reached an agreement with its lenders to amend its credit facility after a debt covenant breach last month caused by a drop in the stock price of ViacomCBS.

NAI said it will now have a revolving facility of $125 million and ample liquidity, in addition to its substantial cash reserves, to fund operations, including its theater business. NAI will not sell stock in ViacomCBS and does not intend to pledge additional stock of ViacomCBS, which remains at existing levels.

NAI, which had used shares of ViacomCBS as loan collateral, was placed on negative credit watch by ratings agency S&P Global on March 10 after the shares skidded so low that the parent was in technical default of an undrawn credit facility. NAI’s debt is not huge relative to its assets. And it was always unlikely the technical breach would become an actual default. Banks gave NAI a waiver through March 28 to resolve the situation renegotiate the loan terms.

ViacomCBS, like most media stocks and the broader market, has taken a beating in recent weeks on fears of the massive economic disruption caused by the coronavirus pandemic. The shares, changing hands at about $14 Thursday, up more than 30% from their recent lows but still down sharply from the high of $53.71.

National Amusements operates more than 950 movie screens in the U.S., U.K. and Latin America under its Showcase, Cinema de Lux, Multiplex, SuperLux and UCI brands. Movie theaters were Viacom patriarch Sumner Redstone’s first business and the exhibitor had long been run by his daughter Shari Redstone.

National Amusements, directly and through subsidiaries, holds about 79% of ViacomCBS voting stock.

This article was printed from https://idealnewspaper.com/2020/03/national-amusement-deal-lenders-viacomcbs-stock-1202893118/