said Thursday it reached an agreement with bondholders to recapitalize its balance sheet and has filed for Chapter 11 bankruptcy.
, in a statement, said the recapitalization plan would reduce its debt to an estimated $100 million from nearly $1 billion. The company reached agreement on the recapitalization plan with a group of bondholders holding about 80.1% of its 11.75% senior secured notes.
The video rental chain said it and its U.S. units filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York. Its non-U.S. operations and its domestic and international franchisees aren't a part of the filing.
"After a careful and thorough analysis, we determined that the process announced today provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our business model to meet the evolving preferences of our customers," said Jim Keyes, Blockbuster chairman and CEO, in a statement.
Blockbuster has been losing market share to
and Redbox kiosks owned by
Blockbuster said Thursday it secured a commitment of $125 million in new debtor-in-possession financing from its senior noteholders.
Blockbuster said it would evaluate its U.S. store portfolio with a "view towards enhancing the overall profitability of its store operations." All 3,000 of the company's U.S. stores will remain open, Blockbuster said.
-- Written by Joseph Woelfel
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