Lions Gate, lenders amend debt pact in face of growing Icahn stake, skirts potential default
By APTuesday, June 22, 2010
Lions Gate, lenders amend debt pact as Icahn looms
SANTA MONICA, Calif. — Lions Gate and its lenders have agreed to modify their credit agreement so that the movie studio won’t default on its debt because activist shareholder Carl Icahn has amassed a big stake in the company.
Lions Gate Entertainment Corp. said Tuesday that terms of its $340 million revolving credit line have been amended.
Previously, if anyone amassed more than a 20 percent stake in the company, the lenders had the right to force immediate repayment of the debt. The threshold has been changed to over 50 percent.
A default on the credit line could have triggered defaults on other debt. The total amount of debt that could be affected is around $480 million.
Icahn has a 31.8 percent stake in Lions Gate. Its shares were steady at $7.
