Tuesday, October 07, 2008
October 07, 2008Blockbuster Oct. 8 said it named Sony Pictures Home Entertainment its top film supplier during the Dallas-based No. 1 DVD rental company’s inaugural supplier summit last week.
By Erik Gruenwedel | Posted: 10 Sep 2008
Movie Gallery and Sopris Capital Advisors, the private equity firm that owns much of the Dothan, Ala.-based DVD rental company’s pre-bankruptcy debt, are seeking to convert up to $205 million of first lien debt into common stock.
Under terms of the deal, which is expected to close Oct. 6, Sopris would receive Gallery common stock valued at $10 per share, according to a regulatory filing.
When Gallery emerged from Chapter 11 protection in May, Sopris converted $72 million of Gallery’s $175 million second lien debt into equity of the restructured company.
Gallery also said it would accept financial assignments up to $250 million with lenders associated with the deal in exchange for common stock at $10 per share. An assignment is typically the transfer of a registered security from one owner to another.
Edward Woo, analyst with Wedbush Morgan Securities in Los Angeles, said with Sopris holding most of Gallery’s debt, it didn’t really make much difference in the allocation of internal finances.
“In the future, debt holders would get more protection and equity holders would get greater upside [with stock valuation],” Woo said. “I do think that [Sopris] wanted to reduce its debt load for business purposes, which included reducing interest expenses associated with the debt.”
Gallery shares fell 59 cents in midday trading to $4.40 per share.