BURBANK, CALIF. — TVN Entertainment Corp. said the company and its major shareholders have completed a major financial restructuring.
The move converts about $166 million of the pay-per-view programmer's high-yield debt to equity, renegotiates key vendor relationships and raises an additional $23 million of working capital.
"TVN is now fully funded and well-positioned to implement its business plan," TVN senior vice president and chief financial officer Sheldon Rabinowitz said in a prepared statement. TVN's principal shareholders are Morgan Stanley Dean Witter & Co., Credit Suisse First Boston Corp., Angelo Gordon, Capital Research and Prudential Securities Inc.
But even though TVN may have gained funding, it is losing a leader. TVN founder and chairman Stuart Levin will step down in conjunction with the restructuring, the company said in a statement.
Levin is leaving to spend more time with his family. He will continue to advise TVN on strategic matters.
"It's time to promote the new management team and provide them with the opportunity to put their vision in place," Levin said in a press release. "I know they will be successful for our customers and shareholders."
Levin started TVN 14 years ago. Its product is now available through 600 cable operators and reaches about 50 million households.
The restructuring follows TVN's agreement to purchase BET Action Pay-Per-View from Avalon Pictures Inc. The pay-per-view channel — now called Action Pay-Per-View — was in danger of being shut down on March 31, before TVN stepped in with a last-minute deal.
According to the agreement, Black Entertainment Television chairman Bob Johnson will retain an interest in the channel. Action was not included in Johnson's sale of BET and its basic-cable networks to Viacom Inc. last year.
TVN said Action will provide uninterrupted service to its cable customers and maintain its focus on urban-oriented programming. The channel had provided mainly action blockbuster movies, B-movies and adult fare.