MGM lenders to vote on debt extension

2:44 AM PDT 10/14/2010 by Carl DiOrio, AP

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As May 15 deadline looms, Lion will seek fifth forbearance

Figure on yet another extension to MGM's debt forbearance agreement.

The Lion has gotten four such extensions previously, including one delaying more than $400 million in interest and principal payments until May 15. With a lenders steering committee set to meet Monday, electronic ballots will be sent early next week to a broader group of debtholders in an attempt to give MGM and its restructuring team even more breathing room.

The proposal is expected to pass, giving MGM at least another several weeks to work on its restructuring.

Strapped with a crushing $3.7 billion in debt, MGM and consultant Moelis & Co. tried unsuccessfully to find buyers for the studio and in recent weeks has been discussing with top industryites means of securing new capital to keep the lights burning in the Lion's Century City lair. The process is expected eventually to result in two additional things: the appointment of a successor to current MGM CEO Stephen Cooper and a shift of most studio equity from a current consortium to the lenders group.

MGM's owners include Providence Equity, TPG Capital, Sony, Comcast, DLJ Merchant and Quadrangle.

Cooper is a turnaround veteran brought in for the sale-or-restructuring process. Companies considering possible new equity investments in MGM include Lionsgate, Access Industries, News Corp. and Qualia Capital.

Time Warner -- which topped bidders in the failed MGM auction with a $1.7 billion offer -- isn't interested in partial ownership. The Warner Bros. parent could re-engage with the Lion in talks regarding a modestly increased bid for the entire studio, but that's considered a long-shot scenario.