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Sumner Redstone: 'Substantial progress' on saving media empire

February 12, 2009 |  6:52 am

Billionaire Sumner Redstone, who has been under pressure to restructure his family company's $1.6 billion in debt, said this morning that "substantial progress" had been made in talks with banks.

"An agreement is now within reach," the 85-year-old Redstone said during a conference call to discuss Viacom Inc.'s  quarterly earnings.Ctlogosmall

In October, Redstone got caught in the stock-market avalanche, which created a credit crisis for the mogul, who owns controlling stakes in Viacom -- which owns MTV, Nickelodeon, Comedy Central and Paramount Pictures movie studio -- and television and radio broadcasting behemoth CBS Corp.

His family company, National Amusements Inc., was forced to sell non-voting shares in Viacom and CBS at record-low prices to come up with cash to satisfy bankers after National Amusements defaulted on bank loans.   Since late last fall, National Amusements -- led by Redstone's daughter, Shari Redstone -- has been working closely with banks to restructure the company's debt. 

A December deadline for National Amusements to repay $800 million in bank loans was extended into this year, a signal that the elder Redstone might be able to pull off his high-wire credit act and save his media empire. In December, National Amusements jettisoned its ailing video-game company and said that it would sell some of its movie theaters to pay down debt.

Redstone did not say when he expected an agreement would be reached, and he declined to answer questions.  However, two people close to National Amusements said this week that a deal could come within the the next few weeks.

-- Meg James