Carolco still reels despite deal

Carolco Pictures’ new TCI deal may extenuate the struggling indie’s financial troubles, but experts indicate it’s premature for the company to celebrate.

The indie has been in the midst of a financial restructuring for months, and insiders say Carolco will likely file yet another restructuring plan with the Securities and Exchange Commission as early as this week.

With or without the TCI deal, Carolco was expected to update its current SEC filing because of ongoing internal changes with its foreign partners, Japan’s Pioneer, Italy’s Rizzoli and France’s Canal Plus, not to mention the addition of MGM as a new investor.

Now with the addition of TCI — which invested in Carolco in exchange for the right to show on pay-per-view up to four of the company’s films on or before the date of their theatrical release — the company will have to present an overhaul of the entire plan to bondholders for approval.

One source close to the deal said that Carolco will expect an 80%-90% range of acceptance from bondholders on the upcoming filing. It originally proposed a swap of old bonds for new ones, plus new common shares (Daily Variety, Dec. 28, 1992). The new filing, which could run to 1,200 pages, will likely contain several more changes.

If the SEC approves the plan and bondholders give it the green light as well, “the restructuring should be in place by July,” an informed source said. Only then would the new cash infusions from TCI, the foreign partners and MGM be available to Carolco to kick start production, according to a Carolco insider.

And while TCI’s investment and a solid cash infusion is obviously a major boost to the ailing indie, analysts say the new PPV deal doesn’t deter speculation that Carolco may file a pre-packaged bankruptcy.

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