Australia’s Nine Nears Deal for Debt


Lenders to Australia’s beleaguered Nine Entertainment television network, owned by CVC Capital Partners Ltd, are close to agreeing on a deal to swap debt for equity, Reuters reported Tuesday. The deal will wipe out CVC’s A$1.8 billion ($1.84 billion) equity investment in Nine, marking the largest-ever loss on a single private-equity deal in Asia, and one of the biggest globally. Nine had proposed a debt-for-equity swap deal to avoid going into receivership.

(Reuters) – Lenders to Australia’s beleaguered Nine Entertainment television network, owned by CVC Capital Partners Ltd, are close to agreeing on a deal to swap debt for equity, sources with knowledge of the talks said.

The deal will wipe out CVC’s A$1.8 billion ($1.84 billion) equity investment in Nine, marking the largest-ever loss on a single private-equity deal in Asia, and one of the biggest globally.

Nine had proposed a debt-for-equity swap deal to avoid going into receivership.

The television network’s creditors met on Tuesday and agreed on a A$2.34 billion enterprise value, which includes debt, and the equity share for mezzanine lenders, the sources said, declining to be identified as the talks were confidential.

Mezzanine lenders would get equity worth A$100 million and they are additionally seeking warrants, the sources said.

Discussions will continue on Wednesday to decide on the warrants for mezzanine lenders including Goldman Sachs Mezzanine Partners, which had lent about A$975 million to Nine, they said.

A CVC spokeswoman could not be immediately reached for comment.

“There is no agreement until agreement is reached on everything,” a spokesman for Goldman Sachs Mezzanine Partners said by telephone, when asked to comment on the talks.

CVC acquired Nine in two deals at the peak of the buyout boom in 2006-2008, overloading on cheap debt just before the global financial crisis hit.

Since then, advertising revenues have collapsed across the media sector, slashing profits at Nine and rival TV networks.

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