It appears Carolco Pictures Inc. has rounded up another source of financing. The troubled indie has tapped its receivables as a way to raise much needed cash , and found an insurance company as a buyer.
Future payments sold
Two weeks ago, it sold off $ 24 million in future payments attachedto its TV unit (Daily Variety, Oct. 22). The payment went to lowering its debt with Credit Lyonnais Bank and obligations with the guilds.
According to a recent filing with the Securities & Exchange Commission, the company sold receivables valued at $ 28.9 million attached to its TV unit to Sun Life Insurance Co. of America. The proceeds would be collectible through 1997, according to the document.
Sources say Carolco can tap as much as $ 100 million in receivables, if pressed. The most lucrative source could be foreign TV rights to films such as “Basic Instinct.”
Carolco faces a looming expense very soon. It missed at $ 2.4 million payment on its 10% convertible subordinated debentures on Oct. 15 and has only until Nov. 15 to make good. Otherwise, the company faces possible default, permitting creditors to push the company into bankruptcy. Bondholders are anxiously awaiting a new recapitalization plan from Carolco’s investment bankers, Jefferson Capital Group and Daniels & Associates.