MGM gets debt forbearance No. 6
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The longest-running drama in the movie business has been renewed yet again.
Metro-Goldwyn-Mayer, which has been teetering on the edge of bankruptcy for nearly a year, received a sixth debt forbearance from its bondholders and banker on Wednesday. The company announced that its lenders have extended the period during which it won’t have to pay principal and interest on its bank debt, including a revolving credit facility, until Sept. 15.
Originally set for October 2010, MGM’s debt deadline has been extended five times, most recently to July 14.
The struggling studio doesn’t have the financial resources to pay its debt. Its major bondholders, who are determining the future of the company, have been considering numerous alternatives for its future. On Tuesday, Lions Gate Entertainment executives made a formal proposal to the steering committee of MGM debt holders about a merger. MGM also has been considering a deal that would have top executives of film entertainment and production firm Spyglass run the studio, as well as a possible transaction with Summit Entertainment.
In a statement, a company spokeswoman said, ‘The lenders [agreed to extend the forbearance period] in support of the company’s ongoing efforts to evaluate long-term strategic alternatives to maximize value for its stakeholders.’
-- Ben Fritz