MUMBAI: With a want of a likely buyer, there is increasing likelihood that MGM will undergo a bankruptcy reorganization.

Six suitors are conducting additional due diligence that includes management presentations of detailed financial information about the studio. But a deadline on second-round bids hasn‘t been set following receipt last month of a dozen non-binding offers in an initial round of bidding best described as underwhelming.

MGM consultant Moelis & Co. invited just half of those making first-round offers to participate in the next phase of the process, including Time Warner, Lionsgate and Access Industries, with Qualia Capital still circling but not actively involved.

Time Warner is considered a favourite to win the competition with a top bid, but it‘s far from certain that the Warner Bros. parent will be motivated to offer top money for the studio whose $3.7 billion debt load prompted the search for a buyer.

With MGM debt recently trading at 60 cents on the dollar, it would mean that MGM would have to sell for more than $2.2 billion to fully pay-off lenders.

But the Lion fetching that sort of money is ruled out.

If a top bid for MGM fails to find enough support among its more than 140 lenders, the only other option would be a debt restructuring. That probably would include a prepackaged bankruptcy reorganization by which lenders would morph into owners and present owners would see their stakes heavily diluted.

MGM owners include Providence Equity, TPG Capital, Sony, Comcast, DLJ Merchant and Quadrangle.