Relativity CEO Says Anchorage Capital Purchased Its Senior DebtAnousha Sakoui and Scott Deveau
Relativity Media LLC, the struggling movie studio backed by billionaire Ron Burkle and Chairman Steven Mnuchin, said lenders including Anchorage Capital Group LLC bought $130 million of its debt.
Anchorage and other existing lenders exercised their right to obtain the holdings from Catalyst Capital Group Inc., according to an e-mailed statement Thursday from Ryan Kavanaugh, the studio’s chief executive officer. The Canadian buyout fund previously acquired Relativity’s entire senior debt and provided a $170 million working capital facility, according to Kavanaugh.
Newton Glassman, managing partner at Toronto-based Catalyst, said the private-equity firm still owns some of Relativity’s senior and junior debt and is helping to lead and participate in a restructuring of the studio.
Kavanaugh has been fighting to keep control of Relativity since the end of May, when loans came due for repayment and the company secured more time from lenders to refinance. He has also been battling lawsuits from vendors and investors for non-payment. Burkle, Mnuchin and hedge funds such as Anchorage Capital are among its creditors.
Catalyst remains supportive of Relativity and is actively participating in finding liquidity solutions for the company on terms that would be “win-win” for its various stakeholders and Catalyst, Glassman said in an e-mail.
The studio has struggled to produce box-office hits. Its biggest movie this year is “The Lazarus Effect,” with $36 million in worldwide ticket sales.
Jonathan Gasthalter, a spokesman for Anchorage, declined to comment.
The company specializes in defaulted and leveraged companies, and became one of the owners of Metro-Goldwyn-Mayer, producer of the James Bond films, after converting its debt in the company to equity through MGM’s bankruptcy in 2010.