Gallery Buys Time With Select Lenders23 Jul, 2007 By: Erik Gruenwedel
Movie Gallery Inc. has worked out a deal with select lenders — effective July 2 — that grants a reprieve against existing financial defaults under its senior credit facility agreement until Aug. 14.
Dothan, Ala.-based Gallery, which operates under the Movie Gallery, Hollywood Video and Game Crazy brands, earlier this month said it had not met its credit requirements due to poor second-quarter sales, and would entertain a possible sale or merger.
“We are pleased to be working cooperatively with our lenders to address the company's current financial situation,” said Joe Malugen, chairman, president and CEO of Gallery. “In the near future, we expect to present a longer-term solution to the lender group that will address the operational and financial issues currently impacting our business.”
Gallery shares closed up more than 5% to 59 cents per share.