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.

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