CVC-backed Nine Entertainment expects modest profit growth in coming year

Nine's growth came on the back of stronger earnings from its television, Ticketek, Acer Arena and Ninemsn divisions, while an 18.5% fall income for magazine unit ACP - which accounts for about 30% of total earnings - was the main drag.

It is claimed that David Gyngell, CEO of Nine, told lenders at a meeting last month that EBITDA for the 2011-2012 fiscal year is likely to be in the region of $430 million, up from original estimates of $420 million.

CVC has committed $1.9 billion in equity to Nine, but the company still owes banks and hedge funds A$2.8 billion in senior debt and A$800 million in mezzanine debt. CVC's hopes of a $5 billion IPO this year now look highly unlikely and, with debts due in February 2013, the private equity firm has begun talks with banks about refinancing. It has been suggested this could involve lenders taking fees from Nine's operational rollover as well as higher interest rates.

The price of Nine's debt has fallen in recent months due to concerns about refinancing at a time when investor sentiment towards traditional, advertising-driven media businesses is weakening.

CVC first invested in Nine's former company, PBL, in 2006 via a 50-50 joint venture with Consolidated Media Holdings. In late 2007, it bought an additional 25% stake in PBL for approximately A$530 million.

In March, Nine Entertainment jettisoned its 49% stake in CarSales.com for a reported A$565.5 million to institutional investors in order to raise capital.

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• Topics
• Australasia
• Consumer
• Restructuring
• Performance
• CVC Capital Partners