Halmi to remain CEO; debt load to be cut in half
Robert Halmi’s RHI Entertainment has filed for Chapter 11 bankruptcy protection in a pre-packaged reorganization plan that is expected to be completed by the first quarter.
The filing had been expected, as RHI has been laden with $600 million in debt since the Halmi clan reacquired the RHI production and distribution operation from Hallmark Entertainment in 2006.
The plan, approved by an overwhelming majority of its lenders, calls for RHI to slash its debt by about $309 million while paying off key creditors, including the major talent guilds.
After the reorg Robert Halmi Jr. and his father Robert Halmi Sr. will continue to own about 15% of the company, with lenders taking over the rest of the equity. Robert Halmi Jr. will remain CEO. At present, the bulk of RHI is owned by private investment firm Kelso & Co.
With the filing, RHI will have access to a $15 million revolving credit facility from JP Morgan Chase Bank and other banks to fund immediate needs and the bankruptcy costs. After the reorg is complete, RHI expects to be able to tap into a $25 million revolving credit facility.
Robert Halmi Jr. emphasized that the company will be in business-as-usual mode during and after the bankruptcy process.
RHI recently completed production on four telepics for Hallmark Channel and two for Syfy, and it is in production now on three $20 million miniseries: “Neverland” and “Treasure Island” for Syfy and “Blackout” for Hallmark.
“At some point early next year, we’ll be out of (bankruptcy) and stronger than ever with a much healthier balance sheet,” Halmi said.