Lionsgate Amends Credit Facility22 Jun, 2010 By: Erik Gruenwedel
Lionsgate June 22 said it has come to terms with JP Morgan Chase Bank, holder of the Santa Monica, Calif.-based mini-major’s $350 million revolving credit facility, regarding a covenant that negated the facility should an investor assume more than 20% of the studio’s outstanding shares.
Under the revised agreement, JP Morgan agreed to increase the covenant from 20% to 50%, with other key financial terms and provisions remaining unchanged.
The issue came to a head after activist shareholder Carl Icahn acquired 32% of Lionsgate common stock through previous stock purchases and ongoing tender offer, with intentions of shaking up management and the board.
Icahn said his $7 per share tender offer remains in effect until June 30. Lionsgate shares were up 1 cent to $7.01 per share in midmorning trading.