Blockbuster-GoingConc

Movie rental company Blockbuster Inc. said Monday the risk that it may not complete financing deals raised “substantial doubt” about its ability to continue as a going concern.

Dallas-based Blockbuster, which has struggled amid the rising popularity of DVD-by-mail services such as Netflix, disclosed the warning in a filing with the Securities and Exchange Commission.

The company had already cautioned last month that its auditor was likely to raise doubts about its ability to stay in business.

A going-concern qualification refers to an auditor’s assessment of a company’s ability to continue to operate for the foreseeable future.

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 Monday, the company said its lenders’ obligation to fund the $250-million credit facility was subject to meeting certain conditions, and there could be no assurances that those conditions would be met.

Even if the loan were funded, the company said, it “may not have sufficient liquidity to finance the ongoing obligations of our business, which raises substantial doubt about our ability to continue as a going concern.”

Blockbuster said it believed it could close the amended credit facility about May 11, although “there can be no assurance regarding these matters.”