MGM Studio Gains Concession From Lenders

RYAN NAKASHIMA

LOS ANGELES (AP) — Less than two months after hiring restructuring guru Stephen Cooper as a top executive, debt-laden Hollywood studio Metro-Goldwyn-Mayer Inc. said Thursday it received a brief respite from making interest payments on nearly $4 billion in debt.

MGM said in a statement its lenders are allowing it to skip interest payments due at the end of September, October and November. Its next interest payment is now due Dec. 15.

The studio, which launched a revamp of the 1980 musical "Fame" last week, owes $3.7 billion to a total 140 lenders in the form of bonds maturing in mid-2012. It also has a $250 million revolving credit facility with JPMorgan due in April.

The agreement "provides MGM with additional liquidity as discussions continue regarding the development of an optimal capital structure," the company said.

A person close to the company said MGM had enough cash on hand to cover the interest payments, but the deal gives it an extra cushion to spend on marketing such upcoming movies as the slasher flick "The Cabin in the Woods," due out in February.