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NEW YORK - Media mogul Sumner Redstone sold his majority stake in video game publisher Midway Games Inc. on Monday as his family's holding company looks to get out from under a $1.6 billion debt.
Redstone, the family's holding company National Amusements Inc. and another entity called Sumco Inc. sold their approximately 87.2 percent interest in Midway to a company led by private investor Mark Thomas, according to a filing with the Securities and Exchange Commission.
The buyer, Acquisition Holdings Subsidiary I LLC, purchased about 80.3 million shares of Midway at $0.0012 per share.
Midway, best known for its "Mortal Kombat" video game, had 92.1 million shares outstanding as of Oct. 31.
Thomas also agreed to assume $70 million of senior secured and unsecured debt in the deal, the filing said.
Movie theater operator National Amusements owes $1.6 billion to a syndicate of lenders led by Bank of America, including $800 million that is set to mature Dec. 19. The Dedham, Mass.-based company had been in talks with lenders on the possibility of selling some of its movie theaters, its Midway interest and its interest in slot machine supplier WMS Industries Inc.
The Midway stake sale is the latest move by National Amusements to try to shore up its finances. Last month Redstone's daughter, Shari E. Redstone, resigned from Midway's board to focus on her responsibilities with National Amusements. Shari Redstone's resignation came after her father, executive chairman of media companies CBS Corp. and Viacom Inc., was forced to sell $233 million of his family's nonvoting stake in both CBS and Viacom in order to avoid violating terms of a loan at National Amusements.
National Amusements, which holds Redstone's controlling interest in Viacom and CBS, said at the time that a drop in value of CBS and Viacom shares had put its debt obligations at risk.
The company also said then that it does not intend to sell any additional shares of Viacom or CBS.
Shares of Midway Games shed 5 cents, or 13.9 percent, to 33 cents in midday trading. Over the past year, the stock has traded between 17 cents and $4.48.
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