Federal Court approves Nine debt scheme
Nine Entertainment has been saved from collapse with a Federal Court judge giving the final tick of approval to a $3.4 billion recapitalisation scheme.
If the lenders had not agreed to the restructure, Nine would have collapsed next week when billions of dollars of debt falls due.
Under the scheme, senior lenders will instead get 95.5 per cent of the equity in Nine, and share $573 million in cash payments. The cash will come from $700 million in new debt that will be raised by Nine after the restructure is completed.
The Goldman Sachs-led mezzanine debt holders, who are owed $1 billion, will end up with 3.75 per cent of Nine and a $22.5 million cash payment. The present owners, CVC Asia Pacific, will end up with 0.75 per cent of the media group and $4.5 million in cash, having lost almost $2 billion on its original investment.
The rest of the cash from the debt raising will stay with Nine as working capital.
Under Nine's new constitution, the board will "use commercially reasonable efforts to effect a listing within 18 months" of the scheme being implemented but it is not obliged to pursue a listing.
Nine will effectively be controlled by two American hedge funds, Apollo Global Management and Oaktree Capital, which will own 37.4 per cent of Nine's equity under the deal.
The Moelis-advised hedge funds will each appoint two directors to Nine's board, as well as jointly appointing a fifth director.
Nine's chief executive, David Gyngell, will take another board seat. The other lenders will appoint another three board members, which are rumoured to include the former treasurer Peter Costello.
The focus will then turn to reviving Nine's financial performance - including its television business, which clawed back some respectability last year with better ratings at the expense of the Ten Network.