Movie Gallery gets longer loan extension
By Cindy Spielvogel -- Video Business,08/28/2007
AUG. 28 | Movie Gallery has received another extension by lenders on its first lien credit facility.
The company now has until Sept. 30 before the lenders can act on Movie Gallery’s existing defaults, provided no further defaults occur.
Previously, Movie Gallery had been given until Aug. 27 to come up with a remedy for the financial crisis that began when it failed to meet loan requirements at the end of the second quarter, prompting fears of a possible bankruptcy.
The new extension was viewed by investors as a largely encouraging sign that the company is working on a plan that will be acceptable to lenders. The company’s stock rose from 30¢ to 45¢ in morning trading.
The agreement was made with lenders including Goldman Sachs Credit Partners and Wachovia Bank. Movie Gallery said it still needs to make an agreement with other lenders.
The new agreement modifies some terms of the loan and puts additional requirements on Movie Gallery, including providing a store closing timetable by Sept. 6.
In announcing the extension, chairman and CEO Joe Malugen said the longer forbearance agreement “allows us time to continue to develop our long-term restructuring plan while we accelerate our current store rationalization process and take other steps to conserve cash and improve profitability.”
The company is expected to close a sizeable number of its stores. Currently, it has about 4,550 stores under the Movie Gallery, Hollywood Video and Game Crazy brands in the U.S. and Canada.
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| Submitted by: | Debbie Phillips (ddphillips_74015@yahoo.com) 11/4/2007 5:32:10 AM PT |
| Location: | Mannford, Oklahoma |
| Occupation: | Not A Movie Gallery Employee Anymore!! |
Let me tell you.. I AM SO GLD TO HEAR ABOUT THIS...I worked for them and they made me so miserable, they treat thier employees and customers like crap..This has been a long time coming, and for me and a alot of thier employees this makes our day..They should learn to treat the employees better and call them by there names and not a number, which is just what they did..I should have known not to sign on with them when at the conversion, they refered to there marketing action guide as MY BIBLE and another one as MY Ten Commandments.. GOD works in mysterious ways...
| Submitted by: | Salinas 10/16/2007 11:19:52 AM PT |
Maybe our struggles just got a little easier with the closures of Hollywood Video's and Movie Gallery's stores!!!! Have you heard what stores in Texas are closing???
| Submitted by: | Lee Smith (eldingo12@hotmail.com) 9/25/2007 12:21:49 PM PT |
| Location: | Laconia NH |
| Occupation: | Store Manager |
I just learned through the "Investor Relations" section on Movie Gallery's web site that Movie Gallery is closing 520 stores. Why wasn't this on VB's news?
| Submitted by: | Brenda 9/21/2007 12:17:43 PM PT |
| Location: | Texas |
| Occupation: | management |
After being told over and over again that buying Hollywood was the dumbest move they could have done, some one will not step up to the plate and say enough!!
Many small towns will miss Movie Gallery but unless someone sends in a new management team they may as well file for BK. Anyone that gives upper management a bonus when they can't make their payments says it all!!
| Submitted by: | Lou Bacon 8/31/2007 6:32:30 PM PT |
| Location: | CA |
| Occupation: | business owner |
What goes around comes around, Movie Gallery is getting a dose of their
own medicine.
| Submitted by: | Jim Payne 8/31/2007 3:01:57 PM PT |
| Location: | MN |
| Occupation: | heavy line tech |
Bankruptcy might be a good thing for movie gallery. It would allow them the oppertunity to get out of some of their leases and reduce the costs of some of their store closings. Many customers would be very sad if Movie Gallery went under. Movie Gallery also employees alot of people closing puts people out of jobs. If MOvie Gallery can pull themselves and there investeors
out of this It would be a good thing.
| Submitted by: | Bill 8/30/2007 12:12:31 AM PT |
Will SOMEONE please put down the Movie gallery horse with the 4 broken legs?
It's just a pity to watch it suffer so long with extention after extention being granted.
Pehaps the guys who lent out the big bucks will finally realize that the light at the end of the tunnel is really the headlamp of the fast approaching "Bankruptcy Train" thats coming right at 'em.
Then again, maybe pigs DO fly.....
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