31 Oct 2010

Spyglass favoured to take over MGM

7:33 am on 31 October 2010

Creditors of the MGM studio in Hollywood have voted in favour of a bankruptcy plan offered by Spyglass Entertainment.

The rescue deal would put the company at the helm of MGM, which has $US4 billion in outstanding debt.

Sources said the creditors rejected a rival offer from the Lionsgate company.

MGM, which has the James Bond franchise, is in debt due to several box office flops and a slump in DVD sales.

The BBC reports the rescue plan provides for MGM's secured lenders to exchange $US4 billion in debt for equity in the company upon its emergence from Chapter 11.

The company would then be taken over by Spyglass.