Blockbuster said Thursday it has eliminated its exposure to the remaining $24 million in letters of credit that it held for Viacom, its former corporate parent.
The move bolsters the struggling movie rental company's financial position. Its shares rose 6 cents, or 8.2 percent, to 79 cents in afternoon trading.
The letters of credit cover potential liabilities for Viacom related to store leases that began before Blockbuster Inc. was spun off in 1999. Last September, Viacom Inc. agreed to cut the face value of the letters to $25 million from $75 million, since many of those leases have been re-negotiated without relying on Viacom credit.
Blockbuster said Viacom's total liability under the leases has now fallen below $25 million, allowing it to eliminate the letters under terms of their credit agreement.
