(Reuters) - Media mogul Sumner Redstone’s daughter Shari said on Tuesday that the movie theater business she runs wasn’t to blame for the forced sale of a chunk of the family’s holdings in Viacom Inc and CBS Corp, the Wall Street Journal reported.
National Amusements Inc, a privately held company controlled by Sumner Redstone, sold more than 20 percent of its stake in Viacom Inc and CBS Corp to pay down debt to comply with its credit agreement covenants.
People familiar with the situation said the loan was used, at least in part, to expand movie theatres and was linked to the operating performance of that business, as well as Viacom and CBS stock, the Journal reported.
“The implication that this stock sale was required by the operation and expansion of the company’s theater circuit is not accurate,” Shari Redstone’s movie theater unit told the paper in an e-mailed statement on Tuesday.
The sale “was the direct result of last week’s historic financial crisis, which included the precipitous...drop in value of CBS and Viacom stock,” the statement said, without elaborating.
People familiar with the situation say Shari Redstone is sensitive to criticism about her management of the movie-theater chain from her father, who chairs the family holding company and has differed with his daughter over the future of the movie-theater business, the Journal said.
Shares of Viacom and CBS had plunged roughly 20 percent last week in their worst single-day fall since they were split into separate companies in late 2005. Both are still controlled by Sumner Redstone.
Calls to CBS Corp and Viacom Inc seeking Sumner Redstone’s reaction were not immediately returned.
Reporting by Shradhha Sharma in Bangalore; Editing by Kim Coghill