Robert L. Johnson, Chairman of RLJ Entertainment, Inc. (NASDAQ: RLJE) today announced that RLJE broadened its strategic partnership with AMC Networks, Inc. to accelerate its content investments and other strategic initiatives for Acorn TV, the premier streaming service for English-language mystery and drama, and UMC (Urban Movie Channel), the first urban-focused premium subscription streaming service. Specifically:
- The AMC Networks Tranche A Term Loan was expanded from $13 million to $23 million. AMC also extended the maturity on the base amount by one year to 2020 with the additional amount due in 2021. In addition, AMC will now receive payment of interest expense entirely in common stock at a fixed conversion price of $3 per share on both the Tranche A Term Loan and Tranche B Term Loan.
- AMC Networks exercised $5 million of its Tranche A Warrants into RLJE common stock at $3 per common share.
- Additionally, dividend payments on the preferred stock held by Robert L. Johnson were eliminated through 100% conversion of his preferred stock to common stock at $3 per share.
- RLJ Entertainment expects to save $5 million in cash annually through the elimination of the abovementioned interest and dividend payments.
- Together, these actions will allow the company to dramatically increase its content investment over the next five years.
- After the preferred stock conversion and Warrant exercise, RLJE has approximately 13 million common shares outstanding.
Robert L. Johnson, Chairman of RLJ Entertainment, stated, "AMC Networks has proven a stellar partner and collaborator in RLJ Entertainment's drive to more firmly establish Acorn TV and UMC as must-have destinations and impactful brands, and we thank AMC Networks President & CEO Josh Sapan and AMC Networks for their increased support. I believe in RLJE's ability and opportunity to accelerate digital channel market penetration and steepen our overall growth trajectory, and I am demonstrating my support by participating through pure common equity."
Miguel Penella, Chief Executive Officer of RLJ Entertainment, stated, "With OTT adoption gaining increased acceptance amongst consumers, we see a unique window of opportunity to take advantage of this trend. This financing reallocates significant levels of cash and limits the Company's level of financial leverage while increasing shareholders equity. We will use these additional resources to intensify our planned investments in original, exclusive and compelling content to expand Acorn TV and UMC programming, in marketing to support awareness and subscription, and in broadening our Digital Channels' domestic and international distribution. Accelerating our Digital Channel growth should in turn drive faster emergence of our higher-margin business model. Our partnership with AMC Networks has not only been financially beneficial but also extremely productive in terms of our strategic collaboration on programming opportunities."
About RLJ Entertainment, Inc.
RLJ Entertainment, Inc. (NASDAQ: RLJE) is a premium digital channel company serving distinct audiences primarily through its popular OTT branded channels, Acorn TV (British TV) and UMC (Urban Movie Channel), which have rapidly grown through development, acquisition, and distribution of its exclusive rights to a large library of international and British dramas, independent feature films and urban content. RLJE's titles are also distributed in multiple formats including broadcast and pay television, theatrical and non-theatrical, DVD, Blu-ray, and a variety of digital distribution models (including EST, VOD, SVOD and AVOD) in North America, the United Kingdom, and Australia. Additionally, through Acorn Media Enterprises, its UK development arm, RLJE co-produces and develops new programs and owns 64% of Agatha Christie Limited. For more information, please visit RLJEntertainment.com, Acorn.tv, and UMC.tv.
