Hollywood studio MGM unveils biz reorganisation plan

Famed for James Bond movies, the production house has been exploring various options, including outright sale to bring down its liabilities. There were also reports that certain Indian entities were interested in acquiring MGM.

"The plan provides for MGM's secured lenders to exchange more than USD 4 billion in outstanding debt for approximately 95.3 per cent of equity in MGM upon its emergence from Chapter 11 (bankruptcy protection)," the film studio said on Thursday.

Chapter 11 is a kind of bankruptcy rule that allows a company to restructure its business, mainly to reduce debt.

As part of restructuring, production company Spyglass Entertainment would contribute certain assets to the reorganised entity in exchange for about 0.52 per cent stake in the new firm.

Further, two entities owned by Spyglass affiliates-– Cypress Entertainment Group and Garoge –- would merge with a subsidiary of MGM, according to the plan.

MGM noted that stockholders of Cypress and Garoge would get around 4.17 per cent of the reorganised company.

Lenders have to vote on the proposed plan by October 22.