Metro-Goldwyn-Mayer believes the extra $250 million to be raised from its enlarged stock offering will tide it through an extra three years to 2002, it said in an SEC filing Monday.
MGM decided last month to double the size of a forthcoming offering to $500 million, underwritten by its majority shareholder Kirk Kerkorian, enabling it to abandon budget cuts which had previously been disclosed, such as a freeze on television development.
Into the millennium
In an amended prospectus for the enlarged offering, the Lion said the funds raised from the offering, along with its credit line, should finance the company’s business plan to 2002. The original prospectus for the $250 million offering had said the company would have the money to carry out its business plan “until at least the end of 1999.”
Wall Street analysts estimate that MGM’s cash flow will increase substantially by 2001 because a substantial number of distribution rights on its film and TV library revert back to the Lion between 1999 and 2001.
Furman Selz analyst Stewart Halpern estimates the library’s cash flow will rise by $132 million over that period from an estimated cash flow of $100 million this year.