Shares of Paramount Global Inc. were popping 5% in premarket trading Friday after the media company’s controlling shareholder announced that it received a $125 million investment.
National Amusements, which is the majority voting shareholder of Paramount
PARA,
struck a deal with BDT Capital Partners for the $125 million preferred equity investment, according to a Thursday press release.
“The investment will position NAI for sustainable growth and further post-pandemic recovery in its underlying operations as movie theatre attendance continues to increase,” National Amusements said in the release. It plans to use the funds, in part, to cut its interest expense and pay down both revolving loan and recent term-loan borrowings.
Read: Streaming nirvana is about to become more expensive — and offer less content
Shari Redstone, the chief executive of National Amusements, said in a release that National Amusements was “committed to supporting Paramount as it takes the necessary steps to build on its success and capitalize on the strategic opportunities in our industry.”
Paramount, the parent of Viacom and CBS, is in the midst of a tumultuous stretch, having recently slashed its dividend by almost 80% in a move that helped send shares down more than 28% on the day of the company’s last earnings report. The company, like others in the media landscape, is navigating the tricky financial balance that’s come with the decline of linear programming and the push to make streaming work economically.
The company’s “updated dividend policy…will further enhance our ability to deliver long-term value for our shareholders as we move toward streaming profitability,” Chief Executive Bob Bakish said in a May 4 release.
Paramount’s shares have shed 56% of their value over the past 12 months, as the S&P 500
SPX,
has ticked up 2%.
This story originally appeared on Marketwatch
