Redbox Breathes New Life After Securing $50M Line of Credit, But CFO Kavita Suthar Gets Cut
Struggling Redbox Entertainment saw its share price more than double to around $9 a share following news that the company had secured a $50 million line of credit.
Redbox, which is suffering a surprisingly faster decline in its core DVD/Blu-ray rental kiosk business than in streaming revenue development, also announced that chief financial officer Kavita Suthar will be leaving the company.
Mitchell Cohen, who Redbox said has served as chief financial officer and chief operating officer “at several public and private companies,” will take over as interim chief financial officer.
Chicago native Suthar, a Redbox veteran who joined former parent company Outerwall in 2015, oversaw Redbox’s IPO through a special-purpose acquisition company last October.
Now she is unemployed.
“Kavita played an important role in the public listing of Redbox and provided the strong financial leadership necessary to see the process through,” said Redbox CEO Galen Smith. “On behalf of the Board of Directors and the management team, I would like to thank her for her contributions over the years. We wish him the best in his future endeavours. »
As for the line of credit, it was reported to the SEC last week and comes via a restructured “vote and support agreement” with HPS Investment Partners.
Redbox reported a $140.8 million loss in 2021 and largely blamed it on COVID-19 damage to the theatrical theatrical film pipeline — fewer movies in theaters means fewer profitable record rentals in the nearly 40,000 Redbox kiosks nationwide.
Redbox is trying to expand the AVOD and FAST businesses to move its customer base of around 40 million users to streaming.