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Warner’s Debt Falls; Sees End to Stock Pledge

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Times Staff Writer

Warner Communications, which last year pledged the stock of its film, record and publishing subsidiaries to secure a credit agreement with its bankers, told the Securities and Exchange Commisssion this week that it expects the pledge to be released around May 1 because of a substantial reduction in debt.

The New York-based entertainment company, beleaguered for two years because of losses in its former Atari video-game and home-computer businesses, told the SEC that, at year-end, it had reduced its revolving credit debt to $245 million, down from $285 million as of Nov. 30. Warner said it has reduced its total debt to less than $700 million and reduced the amount of credit available from its bankers to $250 million, as part of the bankers’ requirements to release the pledge of stock.

Long-Term Debt Down

The company said that, at year-end, it had long-term debt of $499.4 million due after one year, compared to $504.2 million at the end of 1983.

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Shareholder’s equity dropped to $337.5 million at the end of 1984, down from $960.0 million at the end of 1983.

Warner said its 50% owned cable-television company, Warner Amex Cable Communications, reduced its debt to $550 million at the end of 1984, down from $852 million. The cable-TV company, jointly owned by American Express, also reduced the amount of available credit under its bank credit agreements to $624 million, down from $875 million, Warner said.

Warner said that, in the course of 1985, Warner Amex expects to sell net assets of “certain cable systems” valued at $114 million on the balance sheet. Warner spokesman Geoffrey W. Holmes declined to identify the systems or to say whether its troubled Dallas cable-TV system is earmarked for sale.

At year-end, Warner Amex owned 104 cable systems serving about 1.2 million subscribers in 21 states.

Warner disclosed for the first time that it sold its Eastern Mountain Sports retailing subsidiary last month but did not reveal the terms or the buyer.

The company also disclosed new details of its sale last month of its Franklin Mint subsidiary. Warner said it formed a joint venture with subsidiaries of Los Angeles-based American Protection Industries, which in turn bought Franklin Mint for about $96 million in cash and about $66 million in 9% senior subordinated notes maturing after seven years.

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Warner retained a 15% interest and has the right to acquire an additional 15% interest in the joint venture. Warner also retained ownership of Franklin Mint’s Pennsylvania headquarters and plans to lease the premises to the joint venture, Warner said.

Franklin Mint, which sells collectibles mostly by mail, was acquired by Warner for $225 million in March, 1981.

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