A Chinese company is said to be interested in buying a stake in Metro-Goldwyn-Mayer Inc under its reorganization plan which is still awaiting regulatory approval.

The unidentified company intends to buy part of the new company's shares and a United States law firm is arranging the deal, according to Zhou Tiedong, general manager of the marketing division of China Film Group Corp, Beijing News reported yesterday.

The plan will swap US$4.89 billion of debt for most of MGM's equity.

The Chinese firm has to abide by the rules of the US film industry and should also observe MGM's culture and management style, Beijing News cited Chen Yan, a former market development director of MGM China, as saying.

If it succeeds it will follow Beijing-based Orange Sky Entertainment Group (International) Holdings Ltd in gaining a stake in a Hollywood studio. Orange Sky said in September that it has bought a minority stake in Legendary Pictures for US$25 million, becoming the first Chinese film company to own a stake in a Hollywood studio.

MGM is the distributor of James Bond and Rocky movies. On September 30, MGM had US$2.67 billion of assets and US$5.77 billion of liabilities, according to a court filing. It filed for bankruptcy last Wednesday.