Relativity Receives 30-Day Extension to Pay Debts
Sources say the studio, headed by CEO Ryan Kavanaugh, received about $60 million to meet payments that were due May 31.
Relativity Media has received a 30-day extension to meet its debt payment agreements, according to knowledgeable sources.
The studio, headed by CEO Ryan Kavanaugh, received about $60 million to meet payments that were due May 31, the sources added. Relativity needed the holdover funds as it continues to close a longer-term financial deal that poises the studio for an IPO in 2016. Relativity is said to have enlisted a pair of lenders that includes OneWest. The studio declined comment on the specifics of the agreement but issued the following statement:
“Today the company and its lenders have entered into a formal agreement that allows Relativity additional time to close its previously agreed upon financing transaction. This forbearance agreement ensures Relativity additional liquidity as discussions continue. Ryan Kavanaugh, CEO, and Relativity are deeply appreciative of its lenders’ ongoing support, and the company looks forward to continuing to work with its lenders to position us for long-term success.”
The move comes on the heels of Relativity booting Colbeck Capital partners Jason Colodne and Jason Beckman — who Relativity blamed as the source of a recent negative story about Kavanaugh in the New York Post — from its board. The pair resigned under pressure last week.
Kavanaugh, who founded Relativity in 2004, took action against the pair in the wake of a May 22 story that said the mogul needed to raise $200 million before May 31 or else several debt holders — including Colbeck — would seize control of the studio, possibly ousting Kavanaugh as its leader.
Relativity insiders called the story false, insisting that the debt already had been serviced. At the time, Relativity released a strongly-worded statement to THR: "Ryan Kavanaugh remains fully in control of Relativity. Under Ryan’s leadership, Relativity has successfully recapitalized its balance sheet by refinancing its existing debt and raising additional capital in the form of debt and equity."
The studio's next film, Masterminds, will be released on August 19.