Movie rental chain Blockbuster’s troubles aren’t over yet. The company painted a grim picture for itself through an SEC filing yesterday, saying it might not be be able to meet lender conditions needed to complete financing deals, throwing its ability to continue as a so-called “going concern” — auditor-speak for staying in business for the foreseeable future — into doubt.
Last week, Blockbuster said its revolving and term loan agreement was amended, giving it a $250-million revolving loan refinancing that matures Sept. 30, 2010. Lenders including JPMorgan Chase & Co. also agreed to waive any default that could result if auditors attached a “going concern” classification.
But lenders weren’t obligated to fund the $250 million credit facility unless Blockbuster met certain conditions. Blockbuster said yesterday that those conditions might not be met, and that even if the loan did get funded, its ability to operate was still in doubt.
The writing’s been on the wall for Blockbuster for some time now. We outlined some of the (many) missteps the company took in a post last month when the company insisted that it was not going bankrupt this year.