ViacomCBS’s Freefall Forces Parent to Give Up Borrowing Power

AViacomCBS Inc.’s parent company is losing some of its ability to borrow money at a time when its key revenue drivers — movies, movie theaters and live-sports TV broadcasts — have ground to a halt because of the novel coronavirus.
National Amusements Inc., the movie-theater chain that in recent decades has become predominantly a holding company for its controlling stake of ViacomCBS, has reached a deal with Wells Fargo & Co. to restructure its credit facilities, people familiar with the matter said.
The restructuring became necessary after the value of the ViacomCBS shares pledged as collateral for credit fell below Well Fargo’s minimum threshold, the people said.
ViacomCBS’s stock has been under pressure long before fears about the spread of the coronavirus started roiling global markets. Shares started dropping pretty much since the merger of sister companies CBS and Viacom was finalized last year, and are down nearly 65% so far this year.
National Amusements has no plans to sell any voting shares in ViacomCBS stock, one of the people said. Shari Redstone, the chairman of ViacomCBS and president of National Amusements, recently purchased $1 million of nonvoting shares in ViacomCBS.
As part of the deal with Wells Fargo, National Amusements is giving up the $75 million revolving credit line that was available to its movie-theater unit, while the parent company’s $125 million credit line will be renewed. The theater subsidiary will retain access to the parent company’s credit.
Other financial terms of the deal aren’t known. A Wells Fargo spokeswoman declined to comment.