Nine's head off the chopping block

By David Blight | 17 October 2012

The executives at Nine Entertainment Co (NEC) would be breathing a sigh of relief with the news that its senior and mezzanine lenders have finally reached an agreement which will see the company freed from its entire $3.3 billion debt load.

After weeks of stand-offs and heated demands from multiple parties, a deal has finally been struck which will see senior lenders receive 95.5% equity in the company and  mezzanine lenders take 4.5%, while NEC will walk away debt-free.

The senior lenders have been  led by Apollo and Oaktree, while Goldman Sachs has spearheaded the mezzanine lenders. The restructure will be implemented over the next three months.

One the restructure has been put into play, all existing debt will be converted into equity. The debt-for-equity swap will see CVC Asia Pacific relinquish ownership of the company to its creditors.

NEC chairman Peter Bush said: “We believe this is an outstanding outcome for all stakeholders. The business has great momentum and strong cash flow, and now it will have the strongest balance sheet in the industry. It puts the company in a remarkable position to build on the successes of 2012.”

 Bush said Nine Network and Ticketek will continue to run as normal.

NEC chief executive David Gyngell said: “Nine’s back! And back in a huge way with zero debt, which is the best possible news for our stakeholders – Nine’s viewers, our clients, our partners and our staff. As I’ve reiterated throughout this process, Nine is a great business with terrific people and outstanding brands.

“This historic agreement positions us for unrivalled leadership and I cannot wait to lead the Group into an exciting 2013 and beyond.”

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