Blockbuster Inc, the largest store-based U.S. movie rental chain, said the risk that it may not complete a deal to amend its credit facilities raises “substantial doubt" about its ability to continue as a going concern, according to a securities filing on Monday.
Blockbuster Chief Executive Office Jim Keyes warned investors last month that the company's financial statements and auditors' report likely would include reference to going concern risks until the loan amendments were completed.
The company reached an agreement last week with its remaining creditors to restructure a $40 million term loan due in August. Blockbuster had earlier obtained agreements with lenders under its existing revolving credit facility to amend and extend the facility through September 30, 2010.
The principle amount of the facility will be reduced to $250 million, and Blockbuster's creditors agreed to waive default. The amendments were set to close on May 11, the filing said.
“While we believe that...we will be in a position to close on the amended credit facility on or about May 11, 2009, there can be no assurance regarding these matters," the filing said. “The risk that we may not successfully complete this refinancing...raises substantial doubt about our ability to continue as a going concern."
Blockbuster Chief Executive Office Jim Keyes warned investors last month that the company's financial statements and auditors' report likely would include reference to going concern risks until the loan amendments were completed.
The company reached an agreement last week with its remaining creditors to restructure a $40 million term loan due in August. Blockbuster had earlier obtained agreements with lenders under its existing revolving credit facility to amend and extend the facility through September 30, 2010.
The principle amount of the facility will be reduced to $250 million, and Blockbuster's creditors agreed to waive default. The amendments were set to close on May 11, the filing said.
“While we believe that...we will be in a position to close on the amended credit facility on or about May 11, 2009, there can be no assurance regarding these matters," the filing said. “The risk that we may not successfully complete this refinancing...raises substantial doubt about our ability to continue as a going concern."
