Lions Gate to raise coin to trim debt

Total long-term debt now equals $375 mil

Lions Gate will raise between $125 million and $150 million to pay off debt and possibly make future acquisitions.

Indie studio announced late Tuesday that it is proposing to raise the funds through a private placement of senior subordinated notes convertible into common shares.

Net proceeds will be used primarily to convert some short term loans into longer term debt at lower rates, as well as for general corporate purposes, which may include the financing of a portion of any future acquisitions.

Lions Gate acquired Artisan last year, a deal that increased its library and output, but included the assumption of $60 million in debt. As of June 30, Lions Gate had $292 million in bank loans and total long-term debt of $375 million.

Execs have said they plan to pay off $150 million in debt over the next 24 to 28 months and move the unprofitable studio into the black.

It’s not clear what a likely acquisition target for Lions Gate would be with its new funds. Studio may want to once again bolster its library.

While landing Artisan last year gave Lions Gate a whopping 8,000-plus pics, the pending Sony-MGM deal threatens to make that figure an increasingly common standard.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Film News from Variety

Loading