LOS ANGELES (Reuters) - Blockbuster Inc , averting bankruptcy, secured more time from creditors after failing to make July 1 debt payments and said it would begin delisting its shares from the New York Stock Exchange.
The once-dominant chain, which has bled market share to more nimble rivals Netflix Inc
Those creditors agreed to hold off from exercising "remedies" till August 13 on the missed payments.
The company has more than $900 million in debt and it has struggled to cover interest payments.
Also on Thursday, Blockbuster's board agreed to indefinitely extend CEO Jim Keyes' contract, which had been due to expire this week.
"The agreement provides us with additional time and flexibility as we continue to take steps to implement a more appropriate capital structure," Keyes said in a statement.
"While we are making progress in our recapitalization efforts and are in the process of negotiating term sheets with these parties, these are complex multi-party negotiations and take time."
The Wall Street Journal reported last week the company was discussing a cash injection with potential partners in a deal likely to involve some bondholders converting to equity investors.
On Thursday, the company also said it plans to begin delisting from the NYSE after shareholders failed to pass a proposed reverse stock split intended to keep its price at acceptable levels. It now intends to delist both its Class A and Class B common stock.
Blockbuster said last week that preliminary results from a shareholder vote showed it won approval for a reverse stock split. But in a regulatory filing late on Wednesday, the company disclosed that a final count showed it failed to reach the required threshold.
Its proposal was defeated by a low voter turnout. According to its statement, the company's proposal was approved by shareholders holding just 43.4 percent of outstanding stock -- failing to reach the required majority.
The reverse stock split had been key for the company to avoid being delisted from the NYSE for letting its price fall below $1 per share over 30 trading days. The NYSE warned Blockbuster in November 2009 that it risked getting bumped.
Blockbuster closed at 23 cents on Thursday on the NYSE, down about 2.9 percent.
(Reporting by Alex Dobuzinskis; editing by Leslie Gevirtz and Andre Grenon)
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