India’s Sahara in talks to rescue MGM

Sahara India Pariwar, an Indian media-to-sports conglomerate, is in talks to rescue Metro-Goldwyn-Mayer, the debt-ridden Hollywood studio, in a move that would deepen ties between Bollywood and Hollywood.

The Indian group, controlled by billionaire industrialist Subrata Roy, is prepared to pay up to half of the $3.7bn debt accumulated by the famed US film studio, which owns ‘Gone with the Wind’ and the James Bond series, according to a person familiar with the matter, Sahara would receive an equity stake in the company in return.

Sahara had no official comment on Monday except to confirm that the two companies were in talks. “On mutual interest, discussions are on, but it is too early to comment on the issue,” it said, stressing that the talks were at an early stage.

Shares in Sahara One Media and Entertainment, a listed subsidiary of Sahara India Pariwar, rose as much as 5.49 per cent in early trading on Monday in Mumbai, while the Bombay Stock Exchange’s benchmark Sensex traded up 1.27 per cent.

MGM has been in the hands of its lenders for almost a year after it became unable to service its huge debt, amassed when it was taken over in 2005 by a consortium comprising private equity firms, Sony and Comcast.

Several potential buyers have had their eye on MGM in the past year, including Anil Ambani, the Indian billionaire who controls Reliance Big Entertainment, Lions Gate Entertainment, Time Warner and Spyglass Entertainment.

However, no one has yet come forward with a credible offer and creditors are preparing to take over the studio next month in a streamlined bankruptcy.

Mr Roy – one of India’s most flamboyant businessmen with strong political contacts and many friends in Mumbai’s glamorous film circle – has been looking for ways to bring Bollywood closer to Hollywood, according to people close to him.

Sahara, which sponsors the national cricket and hockey teams, recently spent a record $370m to buy a cricket team in the Indian Premier League, and was in talks to acquire Liverpool Football Club before it abandoned discussions in August.