Thursday 24 May 2018

Blockbuster in US bankruptcy move

DVD and games rental company Blockbuster filed for bankruptcy protection in the US today in an attempt to cut its one billion dollar debt mountain.

Blockbuster operations outside the US are unaffected by the developments.

The group has filed so-called Chapter 11 petitions with the US Bankruptcy Court in New York - a provision under US law which allows companies to continue to function while they follow debt repayment plans.

Blockbuster has a plan in place to reduce its debts of nearly $1bn (€750m) to $100m (€75m).

The company has more than 4,000 stores outside the US, including in the UK, Canada, Denmark, Italy and Mexico.

A spokesman for Blockbuster in the UK said it was "not party" to the bankruptcy filing and will continue to trade as normal.

The group has pledged to keep its 3,000 US stores open for the time being, as well as its DVD-vending kiosks, and will continue to provide new releases on the day they become available.

Blockbuster has also secured a $125m loan, which the group said would allow it to keep working during the restructuring process.

Jim Keyes, Blockbuster chief executive and chairman, said: "The recapitalised Blockbuster will move forward better able to leverage its strong strategic position."

This latest move is not unexpected, and follows years of difficulty at Blockbuster, which has struggled to compete with the rise of the internet and the digital downloads it has to offer.

Press Association

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