(Reuters) – Netflix Inc said late on Monday that it agreed to sell $200 million of convertible debt to long-time backer Technology Crossover Ventures as the struggling online video rental company tries to raise new capital.
The zero-coupon notes, due in 2018, convert to Netflix common stock at a price of about $85.80 per share.
The deal requires Netflix to raise at least $200 million selling common stock to other, unaffiliated investors, according to a filing with the Securities and Exchange Commission.
Shares of Netflix fell 2.5 percent to $70.61 in extended trade as investors prepared to be diluted by new stock that may hit the market.
Netflix, which had $159.2 million in cash and cash equivalents at the end of September, has lost about two-thirds of its market value since the company's shares touched a high of almost $300 in July.
The company has struggled to renegotiate video content deals. It has also lost subscribers and warned of a first-quarter loss.
TCV, a leading venture capital firm, has been an investor in Netflix for many years. TCV co-founder Jay Hoag is on Netflix's board.
TCV also has investments in Groupon, Facebook and Electronic Arts.
(Reporting by Himank Sharma in Bangalore and Alistair Barr in San Francisco; Editing by Maju Samuel)
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