1. MGM Studios passes audit

    By Devin Zydel on 2009-07-17

    MGM says in compliance with debt covenants

    LOS ANGELES (Reuters) Metro-Goldwyn-Mayer said on Wednesday it delivered an audit opinion to its lenders showing the troubled studio is financially sound enough to continue operating and was in compliance with all of its debt covenants.

    Sources familiar with the studio, which is scrambling to refinance $3.7 billion of debt, last week told Reuters that results of the audit, conducted by the Bank of Montreal, were expected.

    “Metro-Goldwyn-Mayer Inc today delivered its March 31, 2009 financial statements to its lender group with an unqualified audit opinion along with a certification that MGM is in full compliance with all of its debt covenants,” the company said in a statement.

    The studio, which is expected to soon release Fame and Hot Tub Time Machine, faces a payment of $250 million in April 2010 on its revolving credit, with the $3.7 billion of term debt due in June 2012.

    The debt largely stems from the acquisition of MGM by an investor group in 2004. MGM is owned by a consortium of companies, including private equity firms TPG Capital LP and Providence Equity Partners, Sony Corp and Comcast Corp, which paid about $5 billion in debt and equity to buy the then-publicly traded studio from its majority owner, billionaire Kirk Kerkorian.

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