RLJ Entertainment accelerating content investments

  RLJ Chairman Robert L. Johnson Converts 100 percent of Preferred Stock into Common Stock.

(PRNewswire) – Robert L. Johnson Founder and Chairman of The RLJ Companies – including RLJ Entertainment, Inc. – last week announced that RLJ Entertainment 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 US$13 million to US$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 US$3 per share on both the Tranche A Term Loan and Tranche B Term Loan.

  – AMC Networks exercised US$5 million of its Tranche A Warrants into RLJ Entertainment common stock at US$3 per common share.
  – Additionally, dividend payments on the preferred stock held by Robert L. Johnson were eliminated through 100 percent conversion of his preferred stock to common stock at US$3 per share.
  – RLJ Entertainment expects to save US$5 million in cash annually through the elimination of the above mentioned interest and dividend payments.
  – Together, these actions will allow the company to dramatically increase its content investment over the next 5 years.
  – After the preferred stock conversion and Warrant exercise, RLJ Entertainment 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 RLJ Entertainment’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 over the top (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. 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.
RLJ Entertainment’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 in North America, the United Kingdom, and Australia. Additionally, through Acorn Media Enterprises, its UK development arm, RLJ Entertainment co-produces and develops new programs and owns 64 percent of Agatha Christie Limited. For more information, please visit RLJEntertainment.com, Acorn.tv, and UMC.tv.

Source: RLJ Entertainment