Dallas
– Video rental giant Blockbuster (NYSE: BBI) announced on Thursday that it has eliminated
the final $24 million of certain letters of credit it maintained on behalf of
Viacom (NYSE: VIA), its former parent company.
The letters of credit were maintained by
Blockbuster to cover Viacom’s potential liability under certain Blockbuster
store leases.
The video rental chain said it plans to close nearly 1,000 of its
stores — about 20% — in 2010.
"Eliminating this final $24 million of
credit exposure frees up cash and helps our liquidity," said Blockbuster
CFO Tom Casey.
"Not only were we able to eliminate the previous $51
million of letter of credit exposure with Viacom in 2009, we also raised $675
million on our bond offering to extend our debt maturities into 2014.
"While
2009 was a challenging year in the overall macroeconomic environment, what we
were able to accomplish in such a credit strapped market last year was truly
remarkable."
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