Last quarter, the company lost nearly $76 million on $51.4 million in revenue.
"The company is cash-flow negative," Pachter said. "So unless someone sinks more working capital into it, all [Thomas] can do is liquidate it and hope there's more than $100,000 left at the end of the day."
National Amusements is currently in negotiations with its bank to restructure its debt load after breaching its loan covenants. Half of the debt -- $800 million -- is due Dec. 19, though that deadline is expected to be pushed back to next year, according to people familiar with the situation.
Although the sale was not directly connected to National's restructuring efforts with its banks, one person close to the company said the lenders could look favorably on the action because it would allow National to offset income earned in 2008 in addition to receiving a tax refund on amounts paid in prior years.
National Amusements spokeswoman Brandy Bergman said, "NAI determined that it would be financially beneficial to sell its stake in Midway in 2008" but declined to comment further.
To pare down its debt, National has also been discussing the sale of other assets, specifically part of its movie theater circuit run by Redstone's daughter, Shari, which is based outside Boston, and its stake in slot machine supplier WMS Industries Inc.
Sumner Redstone controls 80% of National, while his daughter owns 20%.
A restructuring plan submitted to bankers last week included a proposal to sell all of the circuit's U.S. theaters outside New England as well as its overseas cinemas in Britain and Latin America, people familiar with the plan said. They said the Redstones wanted to retain ownership of their theaters in Massachusetts, Connecticut and Rhode Island, as well as Russia.
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alex.pham@latimes.com
