MGM gets fourth debt extension as acquisition, restructuring or bankruptcy draws near
Looks like Metro-Goldwyn-Mayer Inc. is getting another stay of execution.
The beleaguered movie studio has received a six-week extension on a looming due date for interest payments on its $3.7-billion debt load while its banks and bond holders debate the future of the company.
MGM confirmed that its 140-plus lenders have agreed to push back the deadline from Friday until May 14. That's the fourth such extension MGM has received since last October. In addition, JPMorgan Chase has agreed to delay the due date for payments on a $250-million revolving credit facility, originally April 8, to May 14 as well.
The expected move gives MGM's stake holders more time to decide whether to accept a $1.5-billion acquisition offer from Time Warner or a competing bid from industrialist Len Blavatnik's holding company, Access Industries, both of which came in below the $2 billion-plus that the studio's creditors were seeking. MGM could also pursue a restructuring plan that would keep it as an independent company, or enter bankruptcy proceedings.
"The lenders took this action in support of the Company’s ongoing efforts to strengthen its financial position, and MGM appreciates their continued support throughout the process," an MGM spokeswoman said in a statement.
-- Ben Fritz