MGM studio wins debt leeway as auction progresses

* Debt forbearance for MGM extended to March 31

* Auction progresses

LOS ANGELES, Jan 29 (BestGrowthStock) – Lenders for Hollywood
studio Metro-Goldwyn-Mayer [MGMYR.UL] agreed to extend a debt
forbearance to March 31, which gives the studio more time to
find a buyer.

The extension, which was expected, exempts the studio from
interest payments. The amount was not disclosed.

“The lenders took this action in support of the company’s
efforts to strengthen its financial position and to facilitate
the company’s ongoing process of exploring strategic
alternatives, which include continuing to operate as a
standalone entity and evaluating a potential sale,” MGM said in
a statement on Friday.

Metro-Goldwyn-Mayer, which received several first-round
bids in an auction, also said it has moved on to the second
round and is conducting due diligence with select bidders, and
that “process is expected to run for the next several weeks.”

MGM is considering a prepackaged bankruptcy along with a
sale, sources familiar with the matter have said.

The move would offer a healthier company to any buyer of
MGM, which has $3.7 billion in debt, by reducing liabilities
and cleaning up its balance sheet, the sources said.

Initial bids, including from Time Warner Inc (TWX.N: ) and
Lions Gate Entertainment Corp (LGF.N: ), had come in at under $2
billion, the sources told Reuters.

MGM is owned by a group including private equity firms TPG,
Providence Equity Partners, DLJ Merchant Banking Partners and
Quadrangle Group and media companies Sony Corp (6758.T: ) and
Comcast Corp (CMCSA.O: ).

The studio has a library of more than 4,000 titles,
including the James Bond and Pink Panther franchises.

Stock Report

(Reporting by Alex Dobuzinskis; editing by Carol Bishopric)

MGM studio wins debt leeway as auction progresses