Creditor meeting brings closure to CVC's $1.4b Nine loss
Creditors of the ailing Australian TV network Nine Entertainment have unanimously approved the company's A$3.4 billion ($3.5 billion) recapitalization, bringing a formal end to CVC Capital Partners' six-year stewardship. The private equity firm has lost almost all its A$1.4 billion ($1.4 billion) equity interest in the company.
According to The Australian, the debt-for-equity swap will replace CVC with US hedge funds Apollo Global Management and Oaktree Capital Management, which will hold an approximate 49% stake.
The loss sustained by CVC represents the largest-ever on a single private-equity deal in Asia and one of the biggest globally. CVC paid A$5.3 billion for Nine - formerly known as PBL Media - through several highly leveraged transactions between 2006 and 2008.
The network narrowly avoided going into administration last October when Apollo and Oaktree, the biggest holders of the firm's A$2.3 billion in senior debt, reached an agreement with mezzanine lenders led by Goldman Sachs. The group, which is owed more than A$1 billion, will end up with 3.75% of Nine and a A$20 million cash payment. CVC still has 1% equity in the group and will recieve A$4.5million in cash
The new agreement facilitates the appointment of a new board to be headed by former Fox Networks executive David Haslingden. The board includes former federal treasurer Peter Costello, Joe Pollard, head of advertising agency Mojo Publicis, and Hugh Marks, who was chief of production company Southern Star.
Apollo's Kevin Crowe and Steve Martinez, and Oaktree's Edgar Lee and Rajath Shourie, are also expected to be appointed to the board.
The directors of the newly recapitalized Nine will consider an IPO within 18 months.
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