Movie Gallery, Game Crazy's parent company, has received more time from its banks to repay its debt.
Movie Gallery, the parent company of game rental outlet Game Crazy that has been recovering from massive financial bleeding, has reached an agreement with its lenders under its First Lien Credit Facility to further extend the Forbearance Agreement until September 30, 2007. The agreement explains that Movie Gallery's lenders will not act on their defaulted loans until the specified date, granted that Movie Gallery does not collect new loans.
Joe Malugen, Chairman, President and Chief Executive Officer, said, "We are pleased to have the continued cooperation of our lenders as well as the ongoing support of our valued employees, customers and business partners. This further extension of the Forbearance Agreement allows us time to continue to develop our long-term restructuring plan while we accelerate our current store rationalization process and take other steps to conserve cash and improve profitability."
Shares of Movie Gallery skyrocketed 36.67 percent today to $0.41, giving the company that also owns Hollywood Video a market capitalization of $13.57 million.