Hollywood mogul Ryan Kavanaugh appears to have solidified his hold on beleaguered entertainment company Relativity Media, thanks to a new deal with a Toronto-based private equity firm.
The development comes amid wide speculation that Kavanaugh would soon lose control of the heavily indebted company, which has struggled to produce hit movies.
According to a person close to the negotiations, Catalyst Capital has agreed to take on all of Relativity's senior secured debt, valued at $150 million. Catalyst agreed to a one-year payment extension on Relativity's debt and is also investing $170 million of equity.
Kavanaugh will remain chief executive and chairman for the Beverly Hills-based company, and Catalyst will take a seat on the board of directors.
The Hollywood Reporter first reported the deal with Catalyst. Relativity would not comment, and Catalyst did not respond to a request for a comment.
Relativity's recent slate has been light on box-office successes.
Its highest-grossing pictures include "Immortals" and "Limitless" from 2011, plus "The Fighter," which was released by Paramount in 2010. Its biggest domestic film in roughly the last year was the family offering "Earth to Echo," which took in $39 million in the U.S.
The company has high hopes for "Masterminds," an upcoming summer comedy that stars Zach Galifianakis, Owen Wilson and Kristen Wiig.
The agreement with Catalyst gives Relativity time to restructure its business and find the elusive box-office winners. The company also has divisions that cover TV, sports and digital media.
Relativity is in negotiations with other debt-holders, including Colbeck Capital, which is expected to agree to the one-year extension, according to the person familiar with the matter.
Relativity and Colbeck have had a tense relationship. Two of the investment firm's partners were pushed off Relativity's board of directors this year.
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