Following up a report from earlier this month which stated that MGM Studios was seeking a refinancing-source for roughly $3.7 billion in debts, it now appears that it may be James Bond that is one of the key reasons the company is determined to stay out of bankruptcy court.
The reason? If forced into Chapter 11 reorganization, MGM’s long-standing hold on the Bond franchise could come into play in court. To avoid that, MGM’s owners might consider giving up a sizable portion of their equity holdings.
MGM is owned by a consortium including Sony, Comcast, TPG Capital and Providence Equity. While there are no suggestions that talks between the studio and its creditors have yielded a specific game plan, some sort of voluntary restructuring could emerge in the absence of any obvious white-knight investor.
One scenario the Hollywood Reporter brings up:
A creditors-led restructuring in which the lenders are allowed to swap a sizable portion of MGM debt for studio equity. Current debtholders include Elliott Associates, a New York-based hedge fund closely tied to Hollywood producer Ryan Kavanaugh that’s been buying up hundreds of millions in distressed MGM debt.
None of this is to say that Kavanaugh’s Relativity Media would come away with rights to Bond — or even The Pink Panther or other core MGM film assets. But if Elliott and Kavanaugh or any other major debtholders are able to convert their holdings into equity, it could provide leverage to secure film-development rights of various lesser properties.
…which would in turn keep MGM (and thus, James Bond) away from the bankruptcy courts.
Time will tell to see how it all plays out.
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