Analysts say it's box office success or bust for debt-ridden filmmaker MGM-Pathe.

Analysts say it's box office success or bust for debt-ridden filmmaker MGM-Pathe

The survival of financially troubled MGM-Pathe Communications Co. depends on whether or not the company can soon produce money-making films, regardless of any cash infusion the company may receive, analysts say.

Beverly Hills-based MGM-Pathe has a tentative agreement to receive $250 million in new operating funds from a unit of Paris-based Credit Lyonnais, according to a published report last week. An MGM-Pathe spokesman declined to comment.

"Capital infusions rarely get movie companies out of trouble. Making movies that make money is the only way to get out of trouble," said Jeffrey Logsdon, an analyst with Seidler Amdec Securities Inc. in Los Angeles.

A spokeswoman for MGM-Pathe said the company has not yet announced its slate of movies for the next 12 months or the dates for their release.

MGM-Pathe has a short but shaky financial history. Pathe Communications, headed by Italian financier Giancarlo Parretti, first made a bid for the $876 million entertainment company in March 1990 and he spent the next seven months making payments toward the purchase. At one time industry analysts doubted that Parretti would be able to finance the deal.

Pathe finally bought MGM/UA last October for $1.3 billion and the combined studios had $2.34 billion of debt on its books with assets of $3 billion. Now Parretti has a financially fragile company on his hands, and several creditors are demanding payment, threatening to file an involuntary bankruptcy petition against MGM-Pathe if they are not paid more than $20 million in overdue bills.

The movie business can be compared to a roller coaster ride, said David Leibowitz, senior vice president of American Securities in New York. "Whether they are about ready to take off on a sustained run up or a choppy period will be a function of the new product they bring out over the next 12 to 18 months," he said.

The new financing, however, does give the company some flexibility, Logsdon said, "but it doesn't remove the real issue of making movies that make money."

Logsdon added that the lenders of the capital must feel confident about MGM-Pathe's future movie slate or they wouldn't consider lending to the company.

The lion at MGM, or Metro Goldwyn Mayer, has been roaring since 1924. Movies with the MGM name on it include "Gone with the Wind," "The Wizard of Oz" and "Singin' in the Rain."