Digital Domain gets debt forbearance

Lenders agree to push enforcement for undisclosed period while f/x company sorts through options

Financially strapped Digital Domain Media Group said its main lenders have agreed to a forbearance, meaning they won’t force the company to repay $35 million it owes. That pressure could have pushed the company into bankruptcy and still might.

DDMG shares plunged more than 30% to 98¢ on Wednesday. That follows a 32% drop on Tuesday. They’ve been falling steadily from a 52-week high of $9.20.

On Wednesday, Digital Domain said that each of the holders of its six senior secured convertible notes “has agreed to forbear from enforcing its remedies” for an undisclosed period. Lenders must give the company at least 48 hours notice if they withdraw the forbearance.

Move gives Digital Domain some breathing room as it explores alternatives, including refinancing by an institutional investor that would also give it some fresh cash for operations, and a significant equity investment by one of Digital Domain’s business partners. The vfx company laid out those possibilities in an SEC filing this week although neither potential investor was named. The $35 million was principal and the company said it was also on the hook for $16 million in accrued interest. It defaulted on the loan by failing to comply with a covenant requiring it to maintain a minimum level of available cash.

“An inability to quickly access additional sources of liquidity to fund the company’s current operating cash needs would materially adversely affect its financial condition and would require it to seek relief or protection from its creditors,” the filing said.

More Film

  • Alita Battle Angel Trailer

    'Alita: Battle Angel': Cyborgs Face Off in Latest Eye-Popping Trailer

    Financially strapped Digital Domain Media Group said its main lenders have agreed to a forbearance, meaning they won’t force the company to repay $35 million it owes. That pressure could have pushed the company into bankruptcy and still might. DDMG shares plunged more than 30% to 98¢ on Wednesday. That follows a 32% drop on […]

  • Robert De Niro

    Robert De Niro in Talks to Join Joaquin Phoenix's Joker Movie

    Financially strapped Digital Domain Media Group said its main lenders have agreed to a forbearance, meaning they won’t force the company to repay $35 million it owes. That pressure could have pushed the company into bankruptcy and still might. DDMG shares plunged more than 30% to 98¢ on Wednesday. That follows a 32% drop on […]

  • Golden Globes

    HFPA, Dick Clark Productions Near New Golden Globe Awards Rights Deal With NBC

    Financially strapped Digital Domain Media Group said its main lenders have agreed to a forbearance, meaning they won’t force the company to repay $35 million it owes. That pressure could have pushed the company into bankruptcy and still might. DDMG shares plunged more than 30% to 98¢ on Wednesday. That follows a 32% drop on […]

  • Wavescape Film Fest Rides High With

    Wavescape Film Fest Rides High With 14th Edition

    Financially strapped Digital Domain Media Group said its main lenders have agreed to a forbearance, meaning they won’t force the company to repay $35 million it owes. That pressure could have pushed the company into bankruptcy and still might. DDMG shares plunged more than 30% to 98¢ on Wednesday. That follows a 32% drop on […]

  • (L to R) Tanya (CHRISTINE BARANSKI),

    Why 'Mamma Mia! Here We Go Again's' Box Office Opening Is Still a Win

    Financially strapped Digital Domain Media Group said its main lenders have agreed to a forbearance, meaning they won’t force the company to repay $35 million it owes. That pressure could have pushed the company into bankruptcy and still might. DDMG shares plunged more than 30% to 98¢ on Wednesday. That follows a 32% drop on […]

  • Locarno: FiGa Films Acquires ‘Temporada,’ Drops

    Locarno: FiGa Films Acquires ‘Temporada,’ Drops Trailer (EXCLUSIVE)

    Financially strapped Digital Domain Media Group said its main lenders have agreed to a forbearance, meaning they won’t force the company to repay $35 million it owes. That pressure could have pushed the company into bankruptcy and still might. DDMG shares plunged more than 30% to 98¢ on Wednesday. That follows a 32% drop on […]

More From Our Brands

Access exclusive content