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Redstone Holding Company in Debt Talks After Viacom, CBS Fall

Sumner Redstone’s National Amusements movie theater circuit said it is in discussions with its bankers and other noteholders about the company’s debt as a result of the sharp drop in the value of the CBS and Viacom stock it holds.

Mr. Redstone had to sell $233 million in nonvoting stock in Viacom and CBS last week to satisfy certain covenants in loans to National Amusements.

The talks are being overseen by a National Amusements board committee comprised of George Abrams, David Andelman and Shari Redstone, Mr. Redstone’s daughter, who runs the theater chain.

“If NAI is unable to access the debt markets to refinance its bank debt, NAI would have to sell all of its nonvoting shares of Viacom and CBS and even begin to sell some of its voting shares,” said Rich Greenfield of Pali Capital.

“While NAI’s net debt/assets is approaching 2x again, following a bounce in stock prices and the sale of shares, a significant drop could put Mr. Redstone in a very challenging liquidity situation.”

National Amusements said Monday it "does not intend to sell any additional shares" of CBS and Viacom.

(Editor: Baumann. Updated 10:25 a.m. to add final paragraph.)

Comments (2)

HERB WERMAN:

Somehow no one brings up that he's been selling Viacom "B" shares back to Viacom since November, 2004. He has sold approximately $1.25 BILLION WORTH of "B" shares under a "PLOY" OF maintaing 6 percent of all his shares. He hasn't sold any voting shares and Viacom under the $8 BILLION SHARE BUYBACK HASN'T BOUGHT ANY "A" SHARES. HE STILL OWNS 71% OF THE VOTING SHARES. I HOPE HE DOESN'T SURVIVE HIS CRISIS.

AND WHAT ABOUT HIS MIDWAY GAMES FIASCO. HE BOUGHT UO SHARES FROM $2 TO $23/SHARE. 83% OF THEIR OUTSTANDING SHARES. HE HAS AN APPROXIMATE $700,000,000 PAPER LOSS. AT THE TIME HE STARTED HIS PURSUIT OF MIDWAY HE WANTED TO SELL MIDWAY TO VIACOM. FOR THE FIRST TIME THE BORED OF PUPPETS SAID NO TO HIM.

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