Nine boss gets $17m sling for saving ship
While the vesting of his performance rights ties Mr Gyngell to the network for three years, he played down concerns he would then head for the exit after nearly two decades with the network.
"I love what I'm doing, and three years is what they offered me," Mr Gyngell said. "Whether short-sighted or not, this is it for me."
Nine released its prospectus for the initial public offering on Monday, confirming that up to $700 million worth of shares - about a third of the company's issued capital - will be for sale at $2.05 to $2.35 a share.
It puts a price tag of up to $2.2 billion on the group, which includes the Nine television network, Ticketek, and Sydney's Allphones Arena.
Most of the proceeds will be going to shareholders selling down their investment, but $300 million will be raised from the issue of new shares to pay down debt to a net $600 million, and add to working capital.
The two hedge funds which in effect control Nine, Apollo Global Management and Oaktree Capital, will keep a combined 36.3 per cent stake in escrow until the release of Nine's full year results for 2014 - a partial sell-down is allowed in February under certain conditions.
Nine's other shareholders will have a combined 30.2 per cent of the company after the float, which they can sell at any time.
According to the prospectus, Nine will report revenue of $1.57 billion for the year to June 30, generating earnings before interest, tax depreciation and amortisation of $305 million and a net profit of $139.5 million.
Mr Gyngell, whose $17 million IPO payday will be on top of his annual remuneration up to $4 million in base pay and short term incentive bonuses, is among the executives who will have incentive to stick around after the float.
The media group's senior ranks will share more than $10 million in Nine shares as performance rights, which vest over three years starting from December 2014.
Mr Gyngell gets more than half of this. His performance rights are valued at just under $5.5 million.
From the float, he receives a further $10 million worth of shares under escrow for three years, and a $2.5 million cash bonus.
Mr Gyngell was instrumental to the deal that saved the group from collapse last year - which saw lenders swap $3.4 billion worth of debt for 95.5 per cent of the equity in Nine - but it had the unintended effect of crystallising millions in losses for Nine's management when the restructure was executed. The shares had been worthless for years thanks to Nine's poor performance.
In the frame
Indicative market value up to $2.17b
Shares on issue post float 931m
Shares to be sold in IPO 305m
Profit forecast 2013-14 $140m
Forecast final dividend for 2013-14 4.1¢
Shares begin trading December 6
Frequently Asked Questions about this Article…
David Gyngell, the chief of Nine Entertainment, is being rewarded with $17 million in cash and shares for his role in saving the company from collapse. This reward is tied to the company's upcoming float on the ASX, highlighting his pivotal role in the company's turnaround.
David Gyngell, the chief of Nine Entertainment, is receiving a $17 million reward in cash and shares for his role in saving the company from collapse. This reward is tied to the company's upcoming float on the ASX, highlighting his pivotal role in the company's turnaround.
The Nine Entertainment IPO offers everyday investors the opportunity to purchase shares in a major media group. With shares priced between $2.05 and $2.35, investors can become part of a company valued at up to $2.2 billion, which includes assets like the Nine television network and Ticketek.
The Nine Entertainment IPO offers everyday investors the opportunity to purchase shares in a major media company. With shares priced between $2.05 and $2.35, investors can participate in the company's growth and potential future dividends.
According to Nine Entertainment's IPO prospectus, the company is expected to report $1.57 billion in revenue and a net profit of $139.5 million for the year ending June 30. This financial performance underpins the company's valuation and attractiveness to potential investors.
The indicative market value of Nine Entertainment after the IPO is expected to be up to $2.2 billion. This valuation includes the Nine television network, Ticketek, and Sydney's Allphones Arena.
Hedge funds Apollo Global Management and Oaktree Capital played a crucial role in Nine Entertainment's restructuring by controlling a significant stake in the company. They will retain a 36.3% stake in escrow until the release of Nine's full-year results for 2014, ensuring stability and confidence in the company's future.
Most of the proceeds from the Nine Entertainment IPO will go to existing shareholders selling down their investment. However, $300 million will be raised from new shares to pay down debt and add to working capital.
Most of the proceeds from Nine Entertainment's IPO will go to existing shareholders selling down their investments. However, $300 million will be raised from new shares to reduce the company's debt to a net $600 million and to boost working capital, strengthening the company's financial position.
Hedge funds Apollo Global Management and Oaktree Capital played a significant role in Nine Entertainment's restructuring. They control a combined 36.3% stake in the company, which will remain in escrow until the release of Nine's full-year results for 2014.
Nine Entertainment's executives, including David Gyngell, have performance rights and shares as incentives to remain with the company post-IPO. Gyngell, for instance, receives $10 million worth of shares under escrow for three years and a $2.5 million cash bonus, ensuring leadership stability.
Nine Entertainment is forecasted to report revenue of $1.57 billion for the year ending June 30, with earnings before interest, tax, depreciation, and amortization of $305 million and a net profit of $139.5 million.
The debt restructuring at Nine Entertainment, which involved swapping $3.4 billion of debt for 95.5% equity, inadvertently crystallized losses for the management. Despite this, the restructuring was crucial in saving the company from collapse and setting it on a path to recovery.
Nine Entertainment's executives, including David Gyngell, have performance rights and shares as incentives to remain with the company post-IPO. Gyngell's performance rights are valued at just under $5.5 million, with additional shares and a cash bonus.
Nine Entertainment shares are set to begin trading on the ASX on December 6. This marks a significant milestone for the company as it transitions to a publicly traded entity, offering new opportunities for investors.
Nine Entertainment shares are scheduled to begin trading on the ASX on December 6. This marks a significant milestone for the company as it transitions to a publicly traded entity.
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