In an effort to pump new life into its troubled balance sheet, Live Entertainment Co. has weighed in with more details of its planned restructuring.
The financially strapped video distributor has been laboring with its bondholders over a new financial plan since the summer.
In a filing with the Securities & Exchange Commission, the company said it is making a preliminary offer to redeem some $ 110 million in bonds and 1.05 million convertible preferred shares–valued at $ 20 million–for new bonds worth an estimated $ 100 million.
Moreover, the company has acknowledged that Pioneer LDCA Inc. is willing to swap its recent $ 15 million investment in a Live limited partnership, for a new preferred stock with the same value.
In addition, bondholders will receive $ 8 million in cash when the deal is finalized.
The holders of the 14.5% bonds, for example, would receive $ 72.72 in cash plus $ 335.20 in face amount of new notes, plus 50.28 shares of new Series B preferred stock for every $ 1,000 in the current bonds.
The preferred shareholders would receive $ 2.98 in new notes and .447 shares in the new Series B preferred.
The new bonds, said the company, would pay 10% annual interest, increasing to 12% after three years. The new B preferred will have an initial 5% cash dividend , or 8% payment-in-kind, growing to 10% and 12%, respectively, after three years.
All this, however, is contingent on clearing several hurdles. First, the company is in the midst of negotiating a new credit line with its banks. Extension talks are ongoing, said Live senior VP Michael White. “We’re meeting a lot. It’s a high priority.”
Moreover, 95% of the bondholders have to sign off on the proposed restructuring. Otherwise, the company warns, it may file for bankrupcty protection and leave the details to a judge’s ruling.
Bondholders are being counseled by attorneys Milbank Tweed Hadley & McCloy and financial advisers Houlihan Lokey Howard & Zukin.