Viacom Gets $1.025-Billion Line of Credit : May Use Funds for Further Acquisitions in Cable-TV Industry

Viacom International, recently on the prowl for investments and acquisitions, said Thursday that it has signed an eight-year, $1.025-billion revolving credit agreement with nine banks.

The New York-based cable and communications conglomerate said the money would be used for “general corporate purposes” and for the company’s already announced acquisition of MTV Networks and the 50% of Showtime/The Movie Channel that Viacom does not already own.

Purchase of the cable properties is to be completed this month and will cost $690 million. But analysts noted that some of the remaining funds could be combined with Viacom’s available cash to fund other purchases.

May Bring $2 Billion

Viacom belongs to one of half a dozen consortiums that are bidding for Westinghouse Electric’s Group W Cable properties, which may sell for as much as $2 billion.

Viacom has also been mentioned as a possible purchaser of the Disney Channel and was reportedly approached recently by broadcaster Ted Turner about purchasing a stake in Cable News Network or other Turner properties. Viacom has not confirmed those talks.

“Some of these funds could go to any of several of these properties,” said Mark Riely, an analyst with the F. Eberstadt & Co. brokerage firm in New York. “They’re clearly looking around.”

David Fluehrer, a spokesman for Viacom, declined to comment further on how Viacom might use the borrowed funds except to say: “I doubt we’ve really decided on all the uses we’ll put them to.”

The company has been steadily gaining strength as a television programmer, and, with the latest acquisitions, will be the sole owner of five cable-TV services: Showtime, the Movie Channel, MTV, VH-1 and Nickelodeon. It also owns one-third of a sixth service, Lifetime.

In a recent interview, Terrence A. Elkes, Viacom’s chief executive, asserted that the company would not be heavily leveraged even after the purchase of MTV and the outstanding interests in Showtime/The Movie Channel.

Similar Terms

The credit agreement with the banks, led by Morgan Guaranty Trust of New York, permits Viacom to borrow at or below the prime rate. The terms are similar to those that the company received in the first quarter of 1984 when it signed a $250-million bank revolving credit agreement, Viacom said.

In its bid for Group W Cable, Viacom is joined by six other parties: Cable Vision Systems, Centel, Rifkin & Associates, Adam Corp., Falcon Communications and D&H; Communications.

Westinghouse has given no indication of when it will announce the winner of that bidding.