Redstone, National Amusements Reach Debt Deal


National Amusements, the theater chain controlled by Viacom and CBS chairman Sumner Redstone, has reportedly reached a deal with its lenders, assuring at least for the near future that the media mogul won't have to reduce his stakes in the two media giants.
According to a report in The Wall Street Journal citing unnamed sources, National Amusements has reached an agreement to restructure its $1.6 billion in debt. And while that may require the sale of some assets, the Journal said those assets would be selected by NAI, not its creditors.
Redstone came under fire last October when he revealed that he had to sell about $233 million worth of his Viacom and CBS stock to satisfy loan commitments at NAI. That sparked fears that the mogul would have to further reduce his interests in the media companies.
In December, Redstone sold his controlling interest in videogame maker Midway Games for about $100,000 in cash, a fraction of what he originally paid for it.
Redstone has hinted for months that negotiations with lenders were moving forward and were going smoothly. And he has vowed that he would not sell any additional shares of Viacom or CBS.
It is likely that NAI will sell some of its theaters to satisfy its obligations - Redstone had said in the past that one of the company's best assets was its real estate.
According to the Journal, NAI has extended its debt maturities to the end of 2010 and will make its first repayment on the closing of the deal - expected next month - reducing its total obligation from $1.6 billion to $1.5 billion. The company will make additional payments later this year and next year, the Journal said.