Tonight:
9°c
Hollywood studio MGM wins respite on payments
02.10.09
Struggling Hollywood studio Metro-Goldwyn-Mayer has gained a short respite from making interest payments as it tries to reach a long-term solution to its mountain of debt.
The studio said that its bankers and bondholders had agreed to let it miss interest payments due in September, October and November pushing its next payment date to 15 December.
According to the studio, the delay “provides MGM with additional liquidity as discussions continue regarding the development of an optimal capital structure in support of the company's long-term business plan”.
MGM owes $3.7 billion to a total of 140 lenders in the form of bonds maturing in mid-2012. It also has a $250 million revolving credit facility with JPMorgan due in April.
MGM was taken private for nearly $5 billion in 2005 by a group of largely private equity firms led by Providence Equity Partners, Texas Pacific, Sony, Comcast, DLJ Merchant Banking Partners and Quadrangle Group.
MGM has struggled to find film financing during the credit crunch and has not been helped by poor takings for some of its films including the recently released remake of Fame.
