UPDATE 2-ViacomCBS-parent National Amusements amends credit terms with lenders

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(Reuters) – National Amusements Inc, the parent of ViacomCBS (VIACA.O), said on Thursday it reached a deal with lenders to amend borrowing terms and has substantial cash reserves to fund operations.

The agreement became necessary after the value of ViacomCBS shares pledged as collateral for credit fell below Wells Fargo & Co’s (WFC.N) minimum threshold, the Wall Street Journal reported, citing people familiar with the matter.

Viacom and CBS completed their merger in December in their third attempt since 2016, and shares of the combined company have been under pressure since. They are down 67% this year.

Following the amendment, the company will have access to a credit line of $125 million, according to a statement.

The holding company, owned by billionaire Sumner Redstone and his daughter, said it would not sell stock in the media firm.

Movie-theater chains, including AMC Entertainment Holdings Inc’s (AMC.N) Showcase Cinemas, Cineplex Inc (CGX.TO) and Cineworld Group’s (CINE.L) Regal Cinemas, have temporarily shut their theaters in a bid to contain the coronavirus spread.

Earlier in March, ViacomCBS Inc said it was exploring options for its publishing unit, Simon & Schuster, as it focuses on its advertising and upcoming streaming businesses.

The unit does not have significant connectivity to the company’s broader business as it’s not video-based, Chief Executive Officer Robert Bakish then said.

On Thursday, news website Deadline reported that the owner of Paramount Pictures and Showtime Networks had received 25 inbound inquiries about buying the unit since then.

Simon & Schuster generated a revenue of $814 million in 2019, accounting for 3% of the company’s total revenue.

Shares of ViacomCBS were down 3% in afternoon trading.

Reporting by Ayanti Bera in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila

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