CVC said to offer Nine's creditors second refinancing plan

Reuters, citing sources close to the deal, reported that creditors have been given two weeks to respond to CVC's latest proposal, which involves dividing the debt into two categories: one allocated to banks and the other to hedge funds, which are said to hold about 40% of Nine's senior debt.

Nine's senior debt is currently due for repayment in February 2013. CVC had hoped that creditors would give the firm more time to repay the load, during which time CVC could have restructured the loans or recoup costs through advertising revenues. In exchange, lenders were thought to have been offered an upfront fee and a higher interest rate.

A group of approximately 80 lenders hold the majority of Nine's senior debt. Of these lenders, hedge funds including Oaktree Capital, Canyon Partners and Anchorage Advisors are believed to hold more than A$500 million, about one-fifth of the total senior debt.

Nine is also said to hold about A$975 million in mezzanine debt, due in April 2014, which is largely held by Goldman Sachs. In light of creditors rejecting Nine's refinancing package, CVC and Goldman agreed to convert the mezzanine debt into equity, according to the Australian Financial Review.

The Financial Times noted that CVC could be saddled with a $2 billion loss - one of the largest losses for a private equity firm in a single deal - if the firm does not come up with a solution to Nine's credit woes.

Nine is one of the largest private equity-owned companies in Australia, bought by CVC at the height of the buyout boom in 2006 for about A$5.3 billion from media baron James Packer.

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• Topics
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• CVC Capital Partners
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• Distressed