Nine Entertainment‘s creditors have approved a $3.6 billion recapitalisation scheme that will see US hedge funds take control of the business, paving the way for a possible listing in 2014, writes Reuters. US hedge funds Oaktree Capital and Apollo Global Management will swap debt to take a 95.5 percent stake in the company. The breakdown between the two funds has not been disclosed.
Reuters – Nine Entertainment’s creditors have approved a $3.6 billion recapitalisation scheme that will see U.S. hedge funds take control of one of Australia’s best known TV networks, paving the way for a possible listing in 2014, a source familiar with the situation said.
The deal, which saves Nine from sliding into receivership and slashes its debt load, comes after long, often tortuous negotiations and after the broadcaster last month defeated some of its creditors who had opposed the scheme in court.
U.S. hedge funds Oaktree Capital and Apollo Global Management will swap debt to take a 95.5 percent stake in the company. The breakdown between the two funds has not been disclosed.
Private equity firm CVC Capital Partners will retain just 1 percent, losing nearly all of its $A1.8 billion investment, the biggest loss on a single private-equity deal in Asia.
Mezzanine debt holders led by funds managed by Goldman Sachs will receive 3.4 percent.
Oaktree and Apollo will have representatives on the new nine-member board, the source told Reuters on condition of anonymity because the agreement is confidential.
The new owners will also consider a possible relisting on the Australian Stock Exchange in 2014. It would likely be the biggest stock market listing in Australia since QR National, now named Aurizon Holdings Ltd, floated in 2010, raising A$4 billion.
“It depends on whether it makes sense at the time,” the person said. There has been a drought of initial public offerings in recent years amid market volatility.
CVC acquired Nine for A$5.3 billion in two deals at the peak of the buyout boom in 2006-2008, of which A$1.8 billion came from its own pocket and the rest through cheap debt financing.
When the global financial crisis hit, advertising revenues collapsed across the media sector, slashing profits at Nine and rival TV networks.
The last hurdle for the recapitalisation plan is a Federal Court hearing on Jan. 29, which is expected to approve the plan.
Spokesmen for Nine, Apollo and Oaktree did not return calls seeking comment.
Nine plans to take on fresh debt of A$700 million after the restructuring, with commitments already secured for about half the amount, according to media reports.
Ten Network Holdings Ltd has also dominated headlines, launching in December its second capital raising in under six months as it seeks to pay down debt and struggles to find hit shows.