The film studio said on Monday that it has received its bids and planned to ask lenders for forbearances on two upcoming debt deadlines. Those three bids include offers from Time Warner, Lions Gate Entertainment and Len Blavatnik’s Access Industries, none of which was much higher than $1.5 billion, according to people briefed on the matter.
Creditors are unlikely to be happy with any proposal under $2 billion, these people said.
MGM has been weighing other options, including a potential prearranged bankruptcy in which creditors would exchange some of their claims for equity, these people said. One person briefed on the matter told DealBook that a decision is unlikely to happen anytime soon.
A complicating factor is the sheer size of MGM’s bank group, led by JPMorgan Chase: the company has some 140 creditors.
In the meantime, MGM is asking for breathing room on two impending debt payments: an interest payment due March 31 and a $250 million principal payment due April 8. Bloomberg News reported that the film studio is asking for an extension of at least the former to May 14.
Susie Arons, a spokeswoman for MGM, declined to comment to DealBook.