MGM gets a little breathing room on its interest payments
Beleaguered studio MGM has been given a reprieve by its lenders from its next three interest payments on its massive $3.7-billion debt. While MGM pleaded in a conference call with creditors last week to delay its payments until February 2010, the studio was given breathing room only until mid-December.
MGM said today that under the terms of a forbearance agreement with its lenders, the company will not have to pay interest due Sept. 30, Oct. 31 and Nov. 30 until Dec. 15. The deal "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 said in a prepared statement.
"With the agreement in place, MGM has taken an important first step in ensuring that the company has enhanced financial stability and adequate liquidity to implement its business strategies," the statement said.
MGM's only movie release for 2009, a remake of the musical "Fame," debuted last weekend with an unimpressive $10 million in ticket sales.
-- Claudia Eller