SUMNER BUMMER GROWS

The credit squeeze continues to tighten on media titan Sumner Redstone and National Amusements, the holding company for his controlling interests in Viacom and CBS.

Privately held National Amusements yesterday said that it is in talks with its lenders to rework the terms of its unsecured-debt package – estimated to total $1.6 billion.

The move comes less than a week after it sold $233 million of its shares in Viacom and CBS to meet debt-covenant agreements, significantly reducing Redstone’s controlling stakes in both companies.

It also comes a day after National Amusements President Shari Redstone – in a perceived shot across the bow at her father – challenged initial reports that she was at fault, in part because the company loaded up on debt to fund the expansion of the movie-theater business she oversees, and the debt covenants are partially linked to the performance of the theater operation.

Shari Redstone issued a statement on Thursday shooting down that idea, noting “the implication that this stock sale was required by the operation and expansion of the company’s theater circuit is not accurate.”

The company said yesterday that Shari, along with board members George Abrams and David Andelman, is spearheading renegotiation talks with the banks.

Meanwhile, Viacom disclosed in a filing yesterday that it and National Amusements were terminating an arrangement between the two companies that enabled National Amusements to sell Viacom shares, as Viacom repurchased the stock under a buyback plan in order to keep its percentage stake in Viacom consistent.

Pali Capital analyst Richard Greenfield said in a note to investors yesterday that both father and daughter are partially responsible for the situation.

Greenfield added that National Amusements’ failure to refinance its debt sooner “appears to be a management/board error.”

The analyst also sparked a furor yesterday morning when he erroneously suggested that the real reason National Amusements was carrying so much debt was because it was tied to the settlement of Redstone’s 2002 divorce of his longtime wife Phyllis.

A few hours later, he retracted the comment, calling the “divorce assumption wrong,” and adding that “it appears that she was paid directly by Mr. Redstone, rather than National Amusements.”

Viacom shares closed down 29 cents, or 1.5 percent, at $18.21. CBS shares closed up 61 cents, or 6.9 percent, at $9.41.