MGM Heading for Auction
For as long as many of us can remember, seeing that roaring lion ‘logo’ of the MGM co. filled our hearts with a sense of warmth. To this day seeing it most probably brings back nostalgic feelings of a fun-filled time.
So it’s sad to say that on November 4th there was a meeting between MGM CEO Stephen Cooper and the company’s 140-member creditor committee which said no to his proposal to convert the debt into equity as part of a restructuring plan to help keep the studio out of bankruptcy.
In yet another meeting on November 6th, the creditors tried to push Cooper into seeking a buyer instead, as the current equity holders (which include Sony and Comcast) have already written down their investments from their 2004 $5 Billion purchase of the studio.
In October, the committee, who have enormous influence over Cooper, gave him until December 15th to relinquish paying interest on the studio’s debt, to help keep the company out of bankruptcy court, on the condition that there will be a major restructuring. According to a source, Cooper is said to have informed the creditors that it is improbable that he can get more than $1.5 billion for the studio. That is roughly what MGM’s rights to the James Bond Franchise might be worth.An MGM spokeswoman refused to comment.
There are a few rumours going around about would-be bidders of the studio, such as Time Warner, Fox, Lionsgate, and Qualia Capital LLC. The presumption is that most would just liquidate MGM and keep the main assets such as MGM’s 4,000-title film library, the Bond franchise and MGM’s rights (along with Warner) to make the Lord of the Rings prequel The Hobbit. However, Qualia Capital has been touted as the only potential bidder that would “save jobs” at MGM by keeping it as a going concern.