National not so amusing to Redstone

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Sumner Redstone is trying to rid himself of debt headaches, which many believe are worse than first thought.

National Amusements, the holding company that houses Redstone's controlling stakes in Viacom and CBS, is looking to restructure or refinance what is widely believed to be $1.6 billion in unsecured debt before half of that amount comes due in December. It remains unclear whether NA might have to sell more CBS and Viacom shares in the process.

The company said Friday that it is in "constructive" discussions with its banks and other debtholders "regarding a covenant issue" on its unsecured debt. It did not provide further details.

The news came days after NA had to sell $233 million in nonvoting shares of the two entertainment companies. The sale was necessary for NA to remain in compliance with its credit covenants after Viacom's and CBS' recent price drops. NA said the talks are overseen by a board committee comprised of George Abrams, David Andelman and Redstone's daughter Shari, who runs NA's movie-theater circuit.

Also Friday, Viacom disclosed in a regulatory filing that it and NA have ended an arrangement that saw NA sell Viacom shares to the company when Viacom bought back its stock to keep its ownership stake in Viacom unchanged. (partialdiff)
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