June 05, 2013 3:33pm PT by Eriq Gardner
Supplier of Hollywood Cameras in Loan Default
Panavision, which for nearly 60 years has been a leading supplier of cameras, lenses and accessories for motion picture and TV production, is in default of a loan.
In 2006, Panavision refinanced its outstanding debt and got more than $300 million in credit facilities from Credit Suisse. Faced with a downturn in movie and TV production, the financially troubled company was forced to do more debt restructuring in 2010 that caused the company's then-largest stakeholder Ronald Perelman to give up a controlling interest.
Now, Wilmington Trust, National Association, the successor collateral agent to Credit Suisse, has filed papers in New York state court and says Panavision is $1.7 million past due.
According to a motion for summary judgment that claims that camera-maker is in breach of contract, Panavision was informed on April 24, 2012 of the default and that outstanding debt would be accelerated. A 180-day "standstill period" commenced, and afterwards, the parties engaged discussions with each other, but Wilmington says Panavision still hasn't cured the existing default.
Originally, back in 2006, Panavision got two credit facilities. According to the lawsuit, the first consisted of $195 million in term loans, up to $35 million in revolving loans, up to $5 million in swingline loans and up to $10 million in letters of credit. The second consisted of $115 million in term loans that was later increased to $140 million.
In 2010, however, in exchange for common stock, 98.8 percent of the second lien term loan was canceled. Just $1.7 million was left due, but Wilmington is now now chasing that money. There could be implications. As part of the loan agreement, Panavision granted the collateral agent a security interest in substantially all of its assets, says a declaration by attorney Daniel Hope at Kaye Scholer, representing the financial institution in the court action.
Panavision was founded in 1954 and leases its cameras to TV and film production studios. Its equipment has been used in many of the industry's biggest films from Ben Hur to the Star Wars films. In recent years, the company has played a leading role in the digital film transition. Recent credits include Ender's Game, The Big Bang Theory, The Walking Dead and Django Unchained.
A Panavision spokesperson responds, "We feel we have a strong position. We're not worried about it. We are disappointed we couldn't reach a commercial resolution on the dispute."
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