Studio given six more weeks of breathing room

Lenders for MGM have agreed to forgive debt payments for the seventh time in a year, giving the storied studio six more weeks of breathing room to restructure.

MGM made the announcement Wednesday as the sixth extension of debt forbearance expired. The new expiration date is Oct. 29.

The announcement said the agreement came from 140 lenders who will not seek remedies over the studio’s nonpayment of interest and principal on the company’s bank debt, including the revolving credit facility, until the new deadline.

“The lenders took this action in support of the company’s ongoing efforts to evaluate long-term strategic alternatives to maximize value for its stakeholders,” MGM said. “MGM appreciates the continued support of its lender group throughout this process.”

MGM had no further comment Wednesday.

MGM’s expected to enter into a pre-packaged bankruptcy and re-emerge between now and the end of October as a debt-free operation that will put much greater emphasis on developing programming — scripted and reality — for cable TV, sources familiar with planning for the Lion said (Daily Variety, Sept. 9).Spyglass toppers Gary Barber and Roger Birnbaum have signed a nonbinding letter of intent to become co-chairmen and co-CEOs of the troubled studio. The two execs have emerged over the past month as the leading candidates to take over management following discussions with MGM’s largest creditors, which include Anchorage Advisers and Highland Capital.

The studio was put up for sale in November but failed to draw bids that were high enough to satisfy the creditors, including a $1.5 billion offer from Time Warner last fall. MGM’s assets include the James Bond franchise and half of “The Hobbit” films, its name and logo, the United Artists operations, a library with more than 4,000 titles and a bare-bones film and TV operation.

MGM’s lone release this year, “Hot Tub Time Machine,” grossed $50 million domestically.

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