MGM creditors get antsy

It's understandable considering that $3.7 billion worth of debt is due in July 2012 (and interest payments are running $250 million a year). Reuters reports that JPMorgan is leading group of 140 creditors, and THR says that Houlihan Lokey has been brought on to propose restructuring options. Meantime, MGM has hired its own financial consultant, Moelis & Co., to figure out how to restructure those loans (or perhaps look at other alternatives). The studio apparently finished FY 2009 with cash flow of $500 million, about a 5 percent drop from a year earlier. So there's no immediate emergency, From THR story:

Last year MGM began aggressively buying film scripts for a new film-production unit topped by ex-Universal exec Mary Parent, but little has emerged from pre-production. The Lion hasn't scheduled a theatrical release for the summer, though the MGM-produced remake of the film musical "Fame" is slotted for Sept. 25. Essentially, the studio has been funding operations from its film library cash flow. But library income has taken a hit as recession-wracked consumers have pulled back from their spending on DVDs in general and catalog releases in particular that have been a virtual ATM machine for the Lion.

Nikki Finke is also weighing in at DHD. She says that Goldman Sachs has been brought in to try and raise additional capital. As you might gather, this story has a lot of moving parts - and all the reports are quoting anonymous sources, so let the reader beware.