National Amusements agrees to debt restructure

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NEW YORK -- Sumner Redstone's National Amusements has reached a definitive agreement to restructure its debt on the terms previously announced, given the privately held company some breathing room as it looks to sell at least parts of its theater circuit.

The agreements extend the maturity of NA's existing debt to Dec. 31, 2010, with certain repayments due in late 2009 and in 2010.

Under the agreements, NA has pledged substantially all of its assets, including its controlling stakes in CBS Corp. and Viacom Inc., to secure the debt.

Viacom and CBS Corp. said in regulatory filings that any debt default could indeed lead to Redstone's holding company's loss of the companies.

"It is the company's understanding that a default under the definitive agreements by National Amusements could cause a foreclosure with respect to the shares of CBS Corp. common stock subject to the pledge, which could result in a future change of control of the company," the CBS filing said. The Viacom filing was nearly identical, but referred to NA's stake in Viacom.

NA said it can repay the restructured debt with cash flow from its operations, tax refunds and the sale of assets as it sees it. It is looking for buyers for most of the theaters in its National Amusements exhibition chain.
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