Nine is expected to raise up to $700 million of debt after a restructure.

Nine still the one in debt. Photo: Gabriele Charlotte

AS THE final details are worked out on the scheme that will save Nine Entertainment from collapse, the only certainty is that Nine will be loaded up with debt after all, but it does not mean the media group's chief executive, David Gyngell, will be left without any financial firepower.

Nine is expected to emerge with $500 million to $700 million of debt - down from $3.2 billion - but much of this is expected to be fresh loans raised after the restructure.

The new loans are expected to provide some capital back to lenders, which are converting their debt to equity in Nine, but it could also be retained to give the network some much-needed working capital.

Nine executives were not available for comment yesterday.

According to sources close to the negotiations, the push by Nine's original senior lenders to have their loans rolled over - rather than converted to an equity stake - has come to nought.

It is believed that this was behind the exit last week of the largest member of their group, Rabobank, which sold its Nine debt on market at a discount. This weakens the hand of the remaining original lenders, which comprise less than 10 per cent of the senior debt by value.

Current plans are expected to see all of the senior lenders treated equally and receive an equal proportion of equity and debt as part of the capital restructure.

There is a very pragmatic reason for this, according to sources. If a restructure is to be enacted before billions of dollars of loans fall due in February, further haggling is not an option.

Details of the agreement need to be nutted out by next week so documentation and approvals for the scheme of arrangement will hit the courts before they go into summer recess next month.

Both classes of lenders have agreed to a deal that will shrink the $3.2 billion debt that threatened to sink the media group and take ownership of Nine instead.

Senior lenders will end up with a 95.5 per cent stake in Nine and the Goldman Sachs-led mezzanine lenders, who faced losing the $1 billion they had invested in second-ranked debt, will receive 4.5 per cent valued at about $100 million.

Goldman Sachs' support was needed because the deed of company arrangement that will bring the debt-for-equity swap into effect needs the separate approval of all classes of stakeholders.

This includes Nine's current owner, CVC, which stands to receive a sliver of equity from Goldman Sachs but will lose most of the $2 billion it invested.

Effective control of the company will fall to US firms, hedge funds Oaktree Capital and Apollo Global Management, which own most of the $2.2 billion of senior debt.

Nine said full details of the restructure would be contained in the scheme booklets, which are expected to be lodged with the Australian Securities and Investments Commission this month.