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ORION PICTURES BOARD AUTHORIZES NEGOTIATION, CONCLUSION OF LETTER OF INTENT WITH NEW LINE, METROMEDIA FOR PLAN OF REORGANIZATION

 ORION PICTURES BOARD AUTHORIZES NEGOTIATION, CONCLUSION OF LETTER
 OF INTENT WITH NEW LINE, METROMEDIA FOR PLAN OF REORGANIZATION
 NEW YORK, Jan. 30 /PRNewswire/ -- Orion Pictures Corp. (NYSE: OPC) announced today that its Board of Directors voted at its meeting yesterday to authorize Orion to negotiate and conclude a letter of intent with New Line Cinema Corp. (AMEX: NLN) and Orion's majority shareholder, Metromedia Co., for a proposed joint plan of reorganization for Orion on terms substantially similar to those previously proposed and publicly disclosed by New Line. The Board's action was taken by the unanimous vote of the directors who are not affiliated with Metromedia, with one abstention by a director who is affiliated with a creditor of Orion.
 The letter of intent authorized by Orion's Board will be subject to Orion's ability to negotiate and accept higher and better offers and will provide that if Orion accepts another offer or abandons the New Line proposal, Orion will reimburse New Line for its expenses incurred in connection with the preparation of the proposed reorganization plan, up to a maximum of $500,000. The provision for expense reimbursement in the letter of intent will be subject to approval by the Bankruptcy Court for the Southern District of New York.
 After the meeting, as a result of discussions between New Line and the Creditors Committee representing the unsecured creditors of Orion, New Line advised Orion of revised terms to be included in the plan to be offered to the holders of Orion's series of unsecured subordinated debt, which are more favorable to such holders than the previously announced plan. Specifically, the revised terms provide that the public bondholders would receive $60 million in principal amount of notes issued by the reorganized Orion; the notes would bear interest at 11 percent per annum and would have a maturity of 10 years with sinking fund provisions in the last four years; and New Line would guarantee up to $4 million of interest payable on the notes each year. In addition, the bondholders would receive 45 percent of the common stock issued by the reorganized Orion and 5 percent of the outstanding stock of New Line. New Line's proposed ownership of reorganized Orion would be 46 percent. The previously announced consulting fee that would have been payable annually to Metromedia in the amount of $600,000 for five years would be eliminated from the plan. In other material respects, the plan would be the same as previously announced. New Line's proposal also contemplates that the definitive agreement would include, among other things, payment by Orion of a proposed $1.5 million termination fee to New Line if Orion thereafter accepts a higher or better offer. The Creditors Committee has advised Orion that if the revised terms are included in the letter of intent, it will not object to Orion's entering into the letter of intent.
 In view of the revised terms of the plan, Orion has scheduled a board meeting for next week to consider the revised proposal.
 The final reorganization plan will ultimately be subject to a number of conditions, including among others, definitive documentation, further action by Orion's board, the approval of certain of Orion's creditors, and confirmation of the plan by the Bankruptcy Court for the Southern District of New York.
 -0- 1/31/92
 /CONTACT: Michael Sitrick or Amy Goldberg of Sitrick & Co., 310-788-2850, for Orion Pictures/
 (OPC NLN) CO: Orion Pictures Corp.; New Line Cinema Corp.; Metromedia Co. ST: New York IN: ENT SU:


KJ -- LA039 -- 5567 01/30/92 20:26 EST
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Publication:PR Newswire
Date:Jan 30, 1992
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