Blockbuster Reduces Letters of Credit Agreement With Viacom by $50 Million
September 02 2009 - 8:30AM
PR Newswire (US)
Letters of Credit Reduction Significantly Improves Company
Liquidity DALLAS, Sept. 2 /PRNewswire-FirstCall/ -- As part of its
ongoing liquidity improvement initiatives, Blockbuster Inc.
(NYSE:BBINYSE:BBI.B) today announced that it has reduced the face
amount of certain letters of credit it maintains on behalf of its
former parent company, Viacom Inc., from $75 million to
approximately $25 million, paralleling a reduction in Viacom's
exposure to Blockbuster lease obligations. The reduction of the
letters of credit follows Blockbuster's announcement on Aug. 28
that it sold its 186-store XTRA-VISION chain in Ireland for cash
proceeds of up to $45 million. "We are pleased to have reached this
agreement with Viacom, which delivers on our promise to improve
liquidity through a number of initiatives," said Jim Keyes,
Blockbuster Chairman and CEO. "This agreement, combined with strong
cash from operations from our core business and proceeds from the
sale of our Xtra-vision chain, will allow us to continue
development of the multi-channel offering of Blockbuster." The
letters of credit are maintained by Blockbuster for Viacom's
benefit to cover Viacom's potential liability under existing
BLOCKBUSTER store leases in place prior to Blockbuster's 1999
initial public offering. Since 2004, many of those leases have been
renegotiated or renewed without reliance on Viacom's credit,
thereby further facilitating the reduction in the face amount of
the letters of credit. Additional details on the agreements with
Viacom that facilitate the reduction in the face amount of the
letters of credit are outlined in a Form 8-K to be filed by
Blockbuster with the U.S. Securities and Exchange Commission. About
Blockbuster Blockbuster Inc. is a leading global provider of
in-home movies and game entertainment with more than 7,100 stores
throughout the Americas, Europe, Asia and Australia. The company
may be accessed worldwide at http://www.blockbuster.com/.
Forward-Looking Statements This press release contains
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements may also be
included from time to time in our other public filings, press
releases, our website and oral and written presentations by
management. Specific forward-looking statements can be identified
by the fact that they do not relate strictly to historical or
current facts and include, without limitation, words such as "may,"
"will," "expects," "believes," "anticipates," "plans," "estimates,"
"projects," "predicts," "targets," "seeks," "could," "intends,"
"foresees" or the negative of such terms or other variations on
such terms or comparable terminology. Similarly, statements that
describe our strategies, initiatives, objectives, plans or goals
are forward-looking. These forward-looking statements are based on
management's current intent, belief, expectations, estimates and
projections. These statements are not guarantees of future
performance and involve risks, uncertainties, assumptions and other
factors that are difficult to predict. Therefore, actual results
may vary materially from what is expressed in or indicated by the
forward-looking statements. The risk factors set forth under "Item
1A. Risk Factors" in our Annual Reports on Form 10-K and other
matters discussed from time to time in our filings with the
Securities and Exchange Commission, including the "Disclosure
Regarding Forward-Looking Information" and "Risk Factors" sections
of our Quarterly Reports on Form 10-Q, among others, could affect
future results, causing these results to differ materially from
those expressed in our forward-looking statements. In the event
that the risks disclosed in our public filings cause results to
differ materially from those expressed in our forward-looking
statements, our business, financial condition, results of
operations or liquidity could be materially adversely affected and
investors in our securities could lose part or all of their
investments. Accordingly, our investors are cautioned not to place
undue reliance on these forward-looking statements because, while
we believe the assumptions on which the forward-looking statements
are based are reasonable, there can be no assurance that these
forward-looking statements will prove to be accurate. Further, the
forward-looking statements included in this press release and those
included from time to time in our other public filings, press
releases, our website and oral and written presentations by
management are only made as of the respective dates thereof. We
undertake no obligation to update publicly any forward-looking
statement in this press release or in other documents, our website
or oral statements for any reason, even if new information becomes
available or other events occur in the future. DATASOURCE:
Blockbuster Inc. CONTACT: Randy Hargrove, Senior Director,
Corporate Communications, +1-214-854-3190, or Investor Relations,
Kellie Nugent, Director Investor Relations, +1-214-854-4442, both
of Blockbuster Inc. Web Site: http://www.blockbuster.com/
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