Once again, reported by multiple sources, MGM’s due date for debt has been extended. Today’s September 15 has turned into tomorrow’s October 29, but that date will likely not matter either. The Hollywood reporter says:
As expected, more than 100 holders of almost $4 billion in MGM have agreed to a seventh debt forbearance agreement with the Century City-based studio. The Lion now has until Oct. 29 to pay lenders $250 million in principal and more than $450 million in owed interest.
But it’s likely the payments never will be made, as the struggling Lion is expected to creep into bankruptcy court before that with a plan for turning debt into lender equity.
This may not mean more delays for ‘The Hobbit’ as there seems to be a plan and leadership at work. As reported last week and updated in the L.A. Times blog:
MGM signed a nonbinding letter of intent with Spyglass founders Gary Barber and Roger Birnbaum to take over management of the Century City-based studio. That deal must be ratified by MGM’s board of directors and more than 100 creditors, who are expected to swap their debt for equity as part of a prepackaged bankruptcy proceeding.