Blockbuster Completes Private Equity Offering15 Nov, 2005 By: Erik Gruenwedel
In a development that could stave off bankruptcy, Blockbuster Inc. today announced it completed a private equity offering of 150,000 shares of convertible preferred stock, realizing gross proceeds of $150 million.
Big Blue said it would use the funds to repay a portion of its $1.3 billion debt in addition to general corporate purposes.
The closing coincided the finalization of a third amendment to Blockbuster's existing credit agreement that would bring about undisclosed changes to the agreement, including “less stringent financial covenants.”
Blockbuster executives had said that without the third amendment, the company would have likely failed to meet previous financial covenants by Dec. 31 and thereafter.
Big Blue shares fell more than 8 percent to $3.63 during mid-day trading.