VideoRated Talking With Possible Investor

VideoRated, a supplier of hotel entertainment systems, said it is negotiating with an affiliate of “a major communications and entertainment” company about a possible equity investment in VideoRated. The proposed investor would provide $6.5 million in financing in exchange for VideoRated stock. It would also provide a lease credit line of about $30 million. The Costa Mesa company said no definitive agreement or letter of intent has been signed with the prospective investor. VideoRated, founded a year ago, operates videocassette dispensing machines in about 4,000 rooms in 25 hotels in California, Arizona, Florida, Ohio and Tennessee. The publicly held company has 15 employees. Larry T. Statt, chairman and president, said the company would use the financing to expand its business, with a goal of installing movie systems in about 9,000 hotel rooms per month.