Redstone appears to be selling his 87% interest in Midway for $100,000 and booking a $800 million loss:
Redstone sells Midway Games to ease debt: report
Mon Dec 1, 2008 5:18am EST
(Reuters) - Media mogul Sumner Redstone has sold his controlling stake in video game company Midway Games Inc (MWY.N: Quote, Profile, Research, Stock Buzz) to a private investor to ease his debt load, the Wall Street Journal said.
Redstone's National Amusements Inc is expected to announce on Monday that it sold the 87 percent stake to investor Mark Thomas, the Journal said.
Thomas has agreed to pay about $100,000, or $0.0012 a share, for the Midway stake and will assume $70 million of senior secured and unsecured debt. Thomas has no prior relationship with Midway Games, the paper said.
The sale amounts to a significant loss on Redstone's investment but secures a hefty tax benefit as he negotiates other asset sales, the paper said.
National Amusements has about $1.6 billion in debt outstanding. Half of that will need to be repaid by year-end.
The company also holds controlling voting stakes in CBS Corp (CBS.N: Quote, Profile, Research, Stock Buzz) and Viacom Inc (VIAb.N: Quote, Profile, Research, Stock Buzz). It had already sold about $230 million in shares of both companies to help meet debt payments.
National Amusements is expected to realize a 2008 tax loss of more than $800 million from the sale, the paper said citing a person familiar with the situation.
The company could use a portion of the loss against income earned this year, as well as a tax refund of amounts paid in prior years, the source added.
National Amusements could not be immediately reached for a comment by Reuters.
(Reporting by Sakthi Prasad in Bangalore; editing by John Stonestreet)
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