(Bloomberg) -- National Amusements Inc., the Redstone family holding company that controls media giant Paramount Global, raised $125 million from an investment firm co-founded by computer billionaire Michael Dell in order to repay debt.

The $125 million in preferred equity investment from BDT Capital Partners will allow National Amusements to pay down a revolving loan and other borrowings, reduce interest expense and position the business for “sustainable growth and further post-pandemic recovery,” according to a statement from the company. 

Shares of Paramount Global that were pledged to support the loans will be returned to National Amusements once the debt is repaid.

Paramount, the parent of CBS, MTV and other TV networks, slashed its dividend by 80% earlier this month as it copes with declining sales in its traditional channels and losses in its streaming business.

Shari Redstone, chief executive officer of National Amusements and chair of Paramount, said the family has conviction that the media company’s streaming strategy will be successful. 

National Amusements includes the Redstone family’s original source of wealth, a chain of movie theaters founded by Shari’s grandfather that currently operates 837 screens. Its credit rating was downgraded by S&P Global on May 15. 

The ratings firm cited National Amusements’ dependence on the Paramount dividend, with income from that source falling to $13 million next year from $61 million in 2022 as a result of the cut.

National Amusements has $75 million in a revolving loan and $305 million in terms loans, according to S&P Global. It will likely operate at break even this year and lose as much as $35 million, before taking into account the current refinancing. The deal is expected to close next week.

BDT Capital Partners is an affiliate of BDT & MSD Partners, a merchant bank that Dell created with financier Byron Trott. It provides advice to family businesses and founder-led companies. It’s been working with National Amusements for about a year, according to two people familiar with their relationship.

Shares of Paramount Global rose as much as 7.5% to $15.13 in extended trading after the announcement. The stock has declined 17% this year through Thursday’s close in New York.

(Updates relationship, adds shares in final two paragraphs.)

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