A deal for big Sumner and the holding company

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Sumner Redstone's holding firm, National Amusements, has reached a deal in principle with its lenders to restructure $1.6 billion in debt and is expected to start soon a sale process for movie theaters with several hundred screens.

The agreement, subject to definitive agreements, follows months of negotiations after NA breached terms of its lending arrangements in the fall, forcing it to sell nonvoting shares of Viacom and CBS Corp., which it controls.

NA said the deal does not require specific asset sales but allows the company to make debt payments with cash flow from operations and through tax refunds and the sale of holdings.

The deal extends the maturity of NA's debt to the end of 2010, giving the privately held firm more breathing room. After a small repayment at the time of closing that will bring its overall debt to $1.46 billion, another debt payment is due toward the end of this year, and two more are due next year. The restructured debt will be secured by all of NA's assets, according to the firm.

Redstone has said he doesn't plan to sell more shares of CBS and Viacom, and sources said Friday that remains his plan — unless he ends up with no other choice.

But NA is expected to try and sell parts of its theater circuit, also called National Amusements. It has theaters with about 1,500 total screens, and sources have said it could shed theaters with about 900 of those screens. (partialdiff)
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