Redstone's Debt Could Still Affect CBS And Viacom

Sumner Redstone

The more SUMNER REDSTONE says that debt renegotiations at NATIONAL AMUSEMENTS are going smoothly, the more WALL STREET believes they aren't, writes PETER LAURIA in TODAY's NEW YORK POST. As REDSTONE repeated YESTERDAY (11/13) that NATIONAL AMUSEMENTS' discussions with banks about its debt are going well, the financial community continued to interpret his comments the same way it does when he voices support for his lieutenants: negatively.

NATIONAL AMUSEMENTS is the privately held movie-theater chain that acts as a holding company for REDSTONE's stakes in CBS, VIACOM, MIDWAY GAMES and other assets.

It faces a mid-DECEMBER deadline to pay down half of its $1.6 billion debt load. The terms of that debt are tied to the value of CBS and VIACOM shares.

"I am pleased that talks with NATIONAL AMUSEMENTS' banks and noteholders are proceeding in a smooth and constructive manner," REDSTONE said in a statement. "It is important to understand that the value of NAI's assets well exceeds its debt and NAI has no intention of selling any stock of either VIACOM or CBS."

Despite the analysts' worry, investors were soothed by REDSTONE's comments, sending CBS shares up 6%, or 36 cents, to $6.43. VIACOM shares jumped more than 7%, or $1.12, to $16.26. Nevertheless, CBS and VIACOM shares are below where they closed at on OCTOBER 10th, the day that NATIONAL AMUSEMENTS disclosed that it would have to sell shares in both companies to meet debt obligations.

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