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MGM DEBT V: The Return of the Forbearance

May 13, 2010 |  4:20 pm

MGM now has as many sequels as "Rocky."

The financially strapped studio has received its fifth extension since last fall on repaying interest and principal on its crushing $3.7-billion debt.

The payment, which also was to be applied to a $250-million revolving credit facility and was scheduled to be paid Friday, is now due July 14.

MGM's creditors still haven't agreed on a plan for the studio's future as they continue to weigh a proposal by its management to keep the company running independently, other restructuring scenarios or a sale to Time Warner Inc., which has had an offer on the table of $1.5 billion.

A week ago, the other bidder for MGM, industrialist billionaire Len Blavatnik, pulled his offer after the deadline he imposed passed without a response.

In a statement Thursday afternoon, MGM said the latest forbearance was granted "in support of the company’s ongoing efforts to evaluate long-term strategic alternatives to maximize value for its stakeholders. MGM appreciates the continued support of its lender group for the process it is undertaking.”

-- Claudia Eller