Blockbuster delays $42.4 mil debt payment
NYSE to delist company's shares; CEO's contract extendedIt's been an eventful anniversary for Blockbuster CEO Jim Keyes.
The company said Thursday it has delayed a $42.4 million debt payment and that the New York Stock Exchange will delist its shares.
Blockbuster also said that Keyes' contract that was to expire this week has been extended for an unspecified amount of time.
Keyes replaced John Antioco on July 2, 2007, when the stock traded at $4.46. A primary reason for Antioco's dismissal was that the stock had sunk 83% in the final five years of his tenure. But under Keyes, Blockbuster shareholders haven't done any better.
On Thursday, the stock closed at 23 cents, 90% lower than where it was on the day Keyes took the helm.
The delisting from NYSE comes because Blockbuster shares have traded below the minimum threshold of $1 for far too long.
Blockbuster thought it had remedied the situation with its decision to do a reverse stock split. While the majority of shareholders who voted were in favor of the plan, not enough bothered to even vote, effectively killing the reverse split.
But it's not all doom and gloom for the once-mighty renter of DVDs, because it received an important reprieve on a debt payment it could not easily afford to have paid.
Blockbuster, which has more than $900 million of debt on its books, said a $23.9 million amortization payment and an $18.5 million interest payment that were due Thursday have been pushed until Aug. 13.
Keyes said he is engaging in multiparty negotiations to alter Blockbuster's capital structure.
"We currently expect any recapitalization to significantly reduce our debt and increase our financial flexibility," he said.
Blockbuster shares were down 3% on Thursday before they were halted pending news of the delisting.