Digital Entertainment Holdings may get warrants for 20 million shares
By Devika Patel
Knoxville, Tenn., Aug. 22 – RLJ Entertainment Inc. negotiated a $65 million term loan with Digital Entertainment Holdings LLC on Aug. 19, according to an 8-K filed Monday with the Securities and Exchange Commission. The loan consists of a $5 million one-year tranche A loan and a $60 million seven-year tranche B loan.
The tranche A loan will bear interest at a rate of 7% per annum, with 4% to be paid in cash and 3% to be paid in shares with a value of $3.00 per share. The tranche B loan will bear interest at a rate of 6% per annum, with 4% to be paid in cash and 2% to be paid in shares.
The investor also will receive warrants for at least 20 million shares, which are exercisable at $3.00, a 59.58% premium to the Aug. 18 closing share price of $1.88.
The first warrant for 5 million shares expires in five years; the second warrant for 10 million shares expires in six years; and the third warrant for 5 million shares expires in seven years.
Proceeds will be used for working capital and general corporate purposes.
The creator, owner and distributor of media content is based in Silver Spring, Md.
| Issuer: | RLJ Entertainment Inc.
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| Issue: | Term loan
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| Amount: | $65 million
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| Maturity: | One year (for $5 million), seven years (for $60 million)
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| Coupon: | 7% (for $5 million), 6% (for $60 million)
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| Warrants: | For at least 20 million shares
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| Warrant expiration: | Five years (for 5 million shares), six years (for 10 million shares), seven years (for 5 million shares)
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| Warrant strike price: | $3.00
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| Agent: | AMC Networks Inc.
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| Investors: | Digital Entertainment Holdings LLC
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| Settlement date: | Aug. 19
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| Stock symbol: | Nasdaq: RLJE
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| Stock price: | $1.88 at close Aug. 18
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| Market capitalization: | $13.96 million
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