Creditors to assume control of New Zealand’s MediaWorks

In June receivers were appointed to oversee a restructuring plan where the broadcaster's assets would be placed in a new entity owned by the debt holders. The lenders agreed to reduce the debt to NZ$100 million ($80.5 million) in return for a stake in the new company.

The new structure will see Oaktree emerge as the biggest shareholder with 26.7% of the holding company. TPG will have 15.7%. RBS will hold 21.9% while Westpac Banking Corp. and Rabobank each will hold 14.6%. J.P. Morgan will own 6.5%.

The deal is expected to be completed by September 30, and will see the broadcaster's assets transferred to Mediaworks Holdings, chaired by Australian businessman Rod McGeoch.

Ironbridge Capital bought MediaWorks from CanWest Global Communications and Brook Asset Management for approximately NZ$740 million in 2007, but like the media industry in Australia and New Zealand as a whole, it struggled as advertising revenues plunged in the wake of the global financial crisis.

"The debt structure that was adopted when MediaWorks changed hands in 2007 was unsustainable after the global financial crisis," Sussan Turner, MediaWorks group managing director, said in a statement in June.

MediaWorks' outgoing holding company, GR Media, had total borrowings of NZ$496.7 million as at August 2012. That included about NZ$25 million of accrued interest, and subordinated and payment in kind shareholder loans of a further NZ$176.8 million, of which NZ$55.7 million was accrued interest.

TPG Capital bought NZ$70 million in debt from Commonwealth Bank of Australia in December 2011.

MediaWorks subsidiaries include RadioWorks and TVWorks. The company operates two free-to-air television channels, a string of national and regional radio stations and an interactive media division responsible for 18 websites and a mobile network.

The insolvency also meant MediaWorks' NZ$172.7 million in programme rights commitments over the coming five years were open to termination.

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• Topics
• Australasia
• New Zealand
• TPG Capital
• Oaktree Capital
• Media
• Leveraged finance