Creditors given green light to take reins at Nine
THE creditors of Nine Entertainment will take ownership of the media group within days after they received Federal Court approval for the scheme which will convert their $3.4 billion worth of debt into equity.
Federal Court judge Peter Jacobson noted the plan won the support of 96.6 per cent of the company's creditors in a vote. Justice Jacobson said he was satisfied that since "no opposition to the scheme has been made, that the scheme is one that appears to be fair and reasonable".
If the lenders had not agreed to the restructure, Nine would have collapsed next week when $2.2 billion worth of senior debt falls due on February 7. Control of Nine will effectively pass from CVC Asia Pacific to Apollo Global Management and Oaktree Capital, which own nearly half the senior debt and will appoint five members of the nine-member board in the first year.
Nine's chief executive, David Gyngell, will take another board seat. Other lenders will appoint another three board members, which are rumoured to include the former treasurer Peter Costello.
Under the scheme, senior lenders will 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 raised by Nine after the restructure. 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.
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.
The focus will then turn to reviving Nine's financial performance.