Hedge funds owning a large chunk of the $2.7 billion debt in Australia's Nine Entertainment, owned by buyout firm CVC, have prepared a proposal to convert their debt into equity in the TV network, a source told Reuters.
The plan if implemented would wipe out most of CVC's equity.
Nine's board declined to meet the hedge funds, Oaktree Capital and Apollo Global Management, which hold $1 billion or 37 per cent of the $2.7 billion senior debt and requested a meeting to put forward the restructuring plan, the person with knowledge of the situation said.
CVC Capital Partners shelved plans before Christmas to refinance the debt, which falls due in February 2013, as banks sold out of the debt and hedge funds aiming to win control raised their stakes.
Hedge funds, including Oaktree, Apollo and Och-Ziff, now control 50 to 60 per cent of the debt and have the power to block any refinancing proposal.
A CVC spokesperson today declined to comment. CVC said last month that there was no requirement to refinance its senior debt in advance of the maturity date.
Reuters