Nine creditors approve restructure
Creditors of Nine Entertainment, owed $3.4 billion, today approved a restructure that will wipe out their debt in return for ownership of the media group.
The schemes will now go back to the Federal Court for final approval on January 29 after which the company will be handed to its new owners lead by hedge funds, Apollo and Oaktree, which will end up with 37.4 per cent of Nine under the deal.
The scheme will mean that senior lenders receive 95.5 per cent of the equity in Nine and share $573 million in proceeds from $700 million worth of fresh debt that will be raised after the restructure is completed.
This will effectively allow these lenders to receive cash for 25 per cent of the $2.28 billion worth of debt they hold.
The remainder of the cash from the debt raising will remain with Nine as working capital.
The mezzanine debt holders, led by Goldman Sachs, which are at present owed more than $1 billion, will end up with 3.75 per cent of Nine and a $20 million cash payment. The current owners, CVC, will end up with one per cent of the media group, having lost close to $2 billion on its original investment.
Under the new constitution the Nine board will "use commercially reasonable efforts to effect a listing within 18 months" of the scheme being implemented but is not obliged to pursue the listing.