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MGM Plans to Sell $750 Million in Stock

July 14, 1999|James Bates

Metro-Goldwyn-Mayer, the loss-plagued movie studio in Santa Monica, said it filed a shelf registration with the Securities and Exchange Commission for the proposed sale of $750 million of its common stock and that the proceeds will be used in part to cover a $112.5-million payment due in September to Warner Bros. home video unit to end early a video distribution arrangement. The funds also will be used toward corporate restructuring costs, to fund film and TV production, to cut bank debt and for working capital needs. The company's largest shareholder, billionaire Kirk Kerkorian's Tracinda Corp., said it intends to support the offering and is willing to buy shares not purchased by the public or current shareholders. MGM said it planned to complete the offering in the fall. MGM, which has not posted a full-year operating profit since 1988, said in SEC documents: "We do not expect to be profitable for at least several years, and we cannot assure you when we will become profitable, if ever."

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