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Sumner Redstone sees 'substantial progress' in talks with banks

The media mogul has been under pressure to restructure the $1.6 billion in debt owed by his family company, which owns controlling stakes in Viacom and CBS.

February 13, 2009|Meg James

Sumner Redstone, under pressure to restructure his family company's $1.6 billion in debt, said Thursday that "substantial progress" had been made in talks with banks.

"An agreement acceptable to all parties is now within reach," the 85-year-old Redstone said during a conference call to discuss Viacom Inc.'s quarterly earnings.

In October, Redstone got caught in the stock market downturn, triggering violation of debt covenants for the mogul's family company, which holds controlling stakes in Viacom -- owner of MTV, Nickelodeon, Comedy Central and Paramount Pictures -- as well as in broadcasting behemoth CBS Corp.

Redstone's family company, National Amusements Inc., was forced to sell nonvoting shares in Viacom and CBS at record-low prices to come up with cash to satisfy bankers after it defaulted on bank loans. Since late last fall, directors of National Amusements -- including Redstone's daughter, Shari -- have been working with banks to restructure the company's debt.

A December deadline for National Amusements to repay $800 million in bank loans was extended into this year, a signal that the elder Redstone might be able to pull off his high-wire credit act and save his media empire.

In December, National Amusements jettisoned Midway Games Inc., its ailing video-game company, and said it would sell some of its movie theaters to pay down debt.

Redstone did not say when he expected an agreement would be reached, and he declined to answer questions. But two people close to National Amusements said this week that a deal could come within the next few weeks.


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