MGM interest payment deadline extended
Lenders are pressing for a sale of the studioThe Lion has another two months of breathing room.
A group of nearly 150 MGM lenders had a Jan. 31 deadline on a big interest payment related to $3.7 billion in studio debt. But MGM said Friday that the lenders had extended the deadline for a third time -- to March 31, in the latest move -- to accommodate a continued solicitation of offers to buy the studio.
It a statement, MGM continued to cling to the notion that a simpler restructuring of finances might be possible. But the lenders are pressing strongly for a sale of the studio.
"The lenders took this action in support of the company's efforts to strengthen its financial position and to facilitate the company's ongoing process of exploring strategic alternatives, which include continuing to operate as a standalone entity and evaluating a potential sale of the company," the studio said. "MGM appreciates the continued support of its lender group."
The studio said it had begun a second phase of the solicitation process. The first round brought roughly 10 non-binding offers to buy the studio, all below $2 billion.
About half the first-round bidders will be invited to a second round of due diligence.
"This phase of the process is expected to run for the next several weeks," MGM said.
Moelis & Co. launched the solicitation process in December. Representatives of Warner Bros., Lionsgate, Liberty Media, AT&T, Summit Entertainment, Reliance Big Entertainment, and Elliott Management, a stakeholder in Relativity Media. Fox is still reviewing financial data while mulling a possible offer.
MGM's current ownership group includes Providence Equity, TPG Capital, Sony, Comcast, DLJ Merchant and Quadrangle.
JPMorgan Chase is leading a steering committee representing the studio's lenders group.