Financially hobbled Carolco Pictures, moving to restructure its debt and spring back to life, launched a crucial exchange offer Thursday. By October, it will find out if bondholders are on board.
Carolco, whose releases include “Basic Instinct” and “Cliffhanger,” said it began the offer for its 14% notes due 1993, a similar offer for its 13% notes due 1996, and an offer to buy all common shares of Vista Organization, a TV and film production company.
The offers are part of Carolco’s previously announced financial restructuring and expire Sept. 30. If the offers are accepted, bondholders would receive an equivalent amount of new notes as well as payment for accrued interest since Dec. 1, 1992.
The notes would be swapped for new bonds with lower interest rates. Holders of the 14% series would receive cash for the accrued interest; holders of the 13 % series would receive half cash and half in notes for the interest.
The restructuring requires at least 75% of the 14% notes and 85% of the 13% notes to be tendered. It also depends on at least 85% of Vista shares that Carolco does not already own being tendered. Carolco holds about 33% of Vista’s outstanding shares, along with proxies giving it control.
Carolco said it has simultaneously begun soliciting acceptances of a pre-packaged plan of reorganization if it is unable to complete the debt swap.
The firm’s restructuring calls for Pioneer and Canal Plus, strategic partners of Carolco, and distribution partner MGM Holding to purchase $ 82.5 million of a new class of preferred stock of Carolco.
Separately, Carolco said it has an agreement with TCI affiliate Encore Media giving that company exclusive pay TV rights to up to 20 Carolco films over a five-year period, beginning with its 1994 releases. No terms were announced.
From Daily Variety staff and wire services