MUMBAI: Burdened by a debt load totaling almost $4 billion, MGM executives were hoping to get enough hit movies into theatres quickly enough to solve its money woes internally, but with growing signs of restlessness among studio creditors
One big motivator: MGM‘s long-standing hold on the 007 franchise could come into play in a court-supervised reorganisation. To avoid that, MGM might consider giving up a sizable portion of their equity holdings.
MGM is owned by a consortium including Sony, Comcast, TPG Capital and Providence Equity. No one is suggesting that talks between the studio and its creditors have yielded a specific game plan. But some sort of voluntary restructuring could emerge in the absence of any obvious white-knight investor.
One scenario would see a creditors-led restructuring in which the lenders are allowed to swap a sizable portion of MGM debt for studio equity. Current debt-holders include Elliott Associates, a New York-based hedge fund closely tied to Hollywood producer Ryan Kavanaugh that‘s been buying up hundreds of millions in distressed MGM debt.