Boosted by James Bond, MGM to announce $650 mln debt deal

Thu Jan 31, 2013 4:48pm EST

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Jan 31 (Reuters) - MGM, the studio behind the James Bond movie franchise, will close a $650 million refinancing of its debt on Friday, reducing the likelihood that the filmmaker will file a contemplated initial public offering in the next few months.

MGM, which emerged from bankruptcy in 2010, will use the debt to replace its existing $500 million credit line and to repay studios that have advanced it funds for joint production on films such as "Hobbit: An Unexpected Journey", which was released in movie theaters on Dec. 14 date and has sold $294.1 million of tickets in the U.S. and Canada.

The studio, which produced last year's blockbuster James Bond film "Skyfall" with Sony's Columbia studio, is taking advantage of sharply lower interest rates to pay repay both Sony and Warner Brothers, with whom it produced the "Hobbit" film, according to a person with knowledge of the impending transaction.

MGM is also contemplating making new media acquisitions or buying film projects as it continues to ramp up its production activities, according to Variety, which first reported the impending refinancing.

Studio spokeswoman Susan Arons had no comment.

MGM Holdings, the studio parent, said in July that it had filed draft registration documents with the Securities and Exchange Commission for a public offering but has since then taken no action despite published reports that it would file before the November release of "Skyfall."

In July, the board also purchased billionaire investor Carl Icahn's 25 percent stake for $590 million, paying $33.50 a share and establishing a market value of $2.4 billion for the company.

The studio's board is made up of representatives of hedge fund investors that include Highland Capital Management and Solus Alternative Asset Management and Anchorage Capital Group. The investors may contemplate an IPO in the future, according to the person.

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