As has been chronicled across business journals and daily Wall Street publications, the Redstone Family‘s National Amusements, Inc., has largely directed the fortunes and future of what is now ViacomCBS. It is Shari Redstone who wanted Bob Bakish to lead the recombined companies, not a CBS Corp. C-Suiter. It is her that a block of any reunification of CBS and Viacom under former CEO Les Moonves never occurred.
Now, however, NAI is “losing some of its ability to borrow money,” The Wall Street Journal reports.
According to the publication, NAI has reached a deal with Wells Fargo & Co. to restructure its credit facilities.
Why? According to sources close to the matter who spoke with the Journal‘s Keach Hagey and Ben Mullin, the move was needed as the value of ViacomCBS stock pledged as collateral for credit fell below Wells Fargo’s minimum threshold.
According to a vague statement released by ViacomCBS on Thursday morning, NAI will have a revolving facility of $125 million “and ample liquidity, in addition to its substantial cash reserves,” to fund operations of NAIEH, which includes its Showcase Cinemas business.
There are zero plans to sell any voting shares in ViacomCBS stock, the NAI statement said.
According to the Journal, the move means NAI is relinquishing the $75 million revolving credit line that was available to Showcase Cinemas.
The fallout from the coronavirus pandemic on Wall Street has been particularly gruesome for ViacomCBS, with its shares trading at $13.83 as of 1:50pm Eastern on Thursday — off more than 6% from Wednesday. However, VIAC is down a whopping 61.2% since February 19, when shares finished the trading day at $35.67.
On July 8, 2019, a $53.18 closing price was logged.
Shari Redstone, who serves as Chairman of ViacomCBS, recently acquired $1 million of nonvoting shares in ViacomCBS.
