Metro-Goldwyn-Mayer Inc. Monday formally announced completing its planned financial restructuring, which includes a shift of $ 960 million in debt onto a newly created subsidiary outfit.
As part of Leo’s new financial clout — and a testament to studio owner Credit Lyonnais’ faith in MGM/UA chairman/CEO Frank G. Mancuso — almost all the revenue-generating assets and businesses of the old MGM entity are now held by Metro-Goldwyn-Mayer Inc. The old MGM’s European cinema assets fall outside this new equation, since they were sold last September to a subsidiary of the French bank.
Approximately $ 960 million of the previous debt owed to Credit Lyonnais Bank Nederland, the bank’s Dutch subsid, will remain at the old MGM company, leaving the parent bank enough fiscal breathing room to keep its promise of funneling an additional $ 210 million into Mancuso’s $ 190 million production slate.
As part of the restructuring, MGM redeemed its 13% debt on Dec. 17, paying bondholders approximately $ 108 million.
“This significant restructuring, which demonstrates the continuing support of Credit Lyonnais, has positioned MGM to aggressively establish its competitive position in our industry,” Mancuso said Monday.
The studio also confirmed earlier reports that former Paramount theatrical exhibition prexy Larry Gleason started Monday as the new prexy of MGM/UA’s distrib arm (Daily Variety, Dec. 30).
“The challenge of rebuilding two of the great names in worldwide distribution , MGM and UA, is most exciting,” said Gleason in a statement. “I am pleased to be reunited with Frank and the innovative team he has assembled.”
Mancuso added that Gleason’s “more than 23 years’ experience in theatrical exhibition, especially in international markets, make him the ideal leader for MGM/UA Distribution Co.”