Blockbuster amends credit agreement again
EmptyBlockbuster Inc., the No. 1 U.S. movie rental chain, negotiated a credit agreement amendment with its lenders to gain more latitude in selling off assets, according to a securities filing Tuesday.
The amendment raises the value of sales, transfers or disposals of assets that Blockbuster may transact without lender approval to $250 million from $100 million.
Under the new amendment, Blockbuster must apply the net proceeds of those transactions to its debt, which totaled $984 million at year's end.
This is the fourth time that Blockbuster has amended its credit agreements since 2005 to service its debt, although the Dallas-based company has made progress in selling off video game and international assets.
Blockbuster and other store-based video rental chains have been hit by declining rental revenue since 2005, as online DVD rental and other forms of entertainment have cut into in-store rental revenue.
Shares of Blockbuster were down 1.3%, or 8 cents per share, at $6.18 on Tuesday on the New York Stock Exchange.