TPG Capital Buys MediaWorks Debt

TPG Capital has bought NZ$70 million ($53 million) of the debt of New Zealand media company MediaWorks from Commonwealth Bank of Australia, Reuters reported. TPG Capital now holds about 20% of the senior loans of MediaWorks, Reuters wrote. MediaWorks was acquired by Australian private equity firm Ironbridge Capital in a NZ$800 million leveraged buyout in 2007.

(Reuters) – Private equity fund TPG Capital has bought NZ$70 million ($53 million) of the debt of New Zealand media company MediaWorks from Commonwealth Bank of Australia (CBA), according to a source familiar with the matter.

MediaWorks, like Nine Entertainment in Australia, was acquired by a private equity fund at the height of the buyouts boom using leveraged debt.

CBA’s NZ$70 million in MediaWorks was part of the leveraged buyout facilities that Australian private equity firm Ironbridge Capital used to buy MediaWorks for around NZ$800 million in 2007.

Both Nine and MediaWorks were subsequently hit by falling advertising revenues, have had their debt restructured and have seen original bank lenders selling their debt.

In recent weeks, banks, including CBA, have sold increasing amounts of Nine Entertainment debt to hedge funds, causing owner CVC Asia Pacific to cancel two restructuring proposals in less than a week.

TPG, which last year led the debt-for-equity recapitalisation of ailing utility Alinta Energy, now holds around 20 percent of the senior loans of MediaWorks, according to the source.

Australian print publication AFR earlier reported the TPG acquisition of debt.

TPG declined comment. CBA was not immediately available for comment.

MediaWorks, which has free-to-air television channels and a radio network, previously went through a debt restructuring in 2010 which saw Goldman Sachs swap out its debt in the company for an equity stake, according to media reports at the time.

Original lenders to the NZ$555 million facilities backing the Ironbridge buyout in 2007 included Bank of Scotland International, the then ABN AMRO Bank, Royal Bank of Scotland , Bank of New Zealand, Rabobank and Westpac Banking Corp, according to Thomson Reuters LPC.