LOS ANGELES – Metro-Goldwyn-Mayer said on Friday it is exploring a potential sale of the company as the storied Hollywood studio struggles to deal with looming debt payments and come up with a long-term business plan.

MGM, whose lenders extended a forbearance until January 31, said its other options include operating as a stand-alone entity or forming strategic partnerships.

A source familiar with the matter said the company was expected to open its books to interested parties in the next few days, the start of a process that could take months.

Companies mentioned in media reports as potential buyers include Lions Gate Entertainment Corp, Time Warner Inc, and Viacom Inc.

Investment bank Moelis & Co, hired by MGM in May to help refinance its debt, will be overseeing the potential sale process, the source said.

The initial goal is setting a price for the studio with the aim of getting the maximum value for investors whether by selling the studio in pieces or as a whole, the source said.

The studio, which has enlisted a restructuring specialist to help turn it around, faces debt obligations of $3.7 billion stemming from its 2005 buyout, plus payments on a $250 million revolving credit facility due April 2010.

It was purchased from majority owner Kirk Kerkorian for $2.85 billion by a group including private equity firms Providence Equity Partners; TPG; DLJ Merchant Banking Partners, a unit of Credit Suisse; and Quadrangle Group; and media firms Sony Corp and Comcast Corp. The group also assumed a debt of $2 billion.

MGM, whose renowned film library includes James Bond films, got a forbearance agreement last month that expired December 15.

That agreement exempted it from interest payments of an undisclosed amount as it continues talks with lenders to develop a new capital structure and support a long-term business plan.

Film financing experts said MGM had been funding operations largely through library cash flow and access to $500 million in financing set up for its United Artists label, which is partly owned by movie star Tom Cruise.

Movies that are currently in production and projects in the development pipeline will continue, and current leadership will stay in place, the source said.