Movie Gallery Refinances Debt6 Feb, 2007 By: Jessica Wolf
Movie Gallery is refinancing its more than $1 billion in debt.
The Alabama-based rental chain announced today it has signed an underwritten financing commitment with Goldman Sachs Credit Partners, which will refinance the entirety of Gallery's senior credit facility by the end of the first quarter of 2007.
That will replace Gallery's existing outstanding debt and garner some working capital for the No. 2 chain, which has struggled financially in the wake of purchasing the Hollywood Video chain. Gallery also will use the refinancing to pay fees and expenses associated with its debt and use it for other general corporate purposes.
"The new credit facilities will provide Movie Gallery with additional financial flexibility to carry out our business plan for the future," said company CEO Joe Malugen. "We are pleased to have this financing commitment from Goldman Sachs and look forward to executing on our strategy to deliver renewed growth and profitability for our shareholders."
Movie Gallery is expected to announce fourth-quarter and full-year 2006 financial results some time in the next week or so. The company previously announced it would be in compliance for it's debt for those fiscal periods, but acknowledged it would need debt restructuring of some kind to remain so in the first quarter of 2007.