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MGM is For Sale

MGM is officially up for sale, according to Variety. Bondholders have given the company a month and a half to come up with a new cash infusion or a buyer before more debt payments are due.

According to sources close to the company, MGM's investment bankers Moelis & Co. are overseeing the sales process, while current management will remain in place with feature development and production continuing. MGM's lenders had agreed previously to let the studio forgo three interest payments until Dec. 15.

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The announcement came following mounting speculation that MGM was heading toward an auction of assets, which include the 4,000-title library, the logo, the United Artists operations, rights to the James Bond franchise and half-ownership in the upcoming "Hobbit" films. Possible buyers include Time Warner, News Corp. and Lionsgate.

MGM has $3.7 billion in debt. Bondholders have allowed MGM to forego interest payment three times already, but their patience is fraying. MGM management says its open to various ideas for solving its financial problems, but an outright sale seems the most likely outcome, with some kind of restructuring of the debt.

Posted on November 13, 2009

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