Nine's creditors reject debt restructure plan

Global reports note that CVC withdrew its proposal for a two-and-a-half-year extension on refinancing the debt, which is due for repayment in February 2013. A delay may have given CVC the opportunity to restructure the loans or recoup costs through advertising revenues. In exchange, lenders are 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 are said to hold up to 40% of the amount owed, with Oaktree Capital, Canyon Partners and Anchorage Advisors believed to hold more than A$500 million, about one-fifth of the total senior debt.

Reports last week found that a group of hedge fund investors purchased an additional A$130 million worth of senior debt from BNP Paribas and Commonwealth Bank of Australia (CBA), looking to bolster their voting power ahead of the restructure vote.

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 added that if CVC does not come up with a solution to Nine's credit woes, CVC stands to suffer one of the largest losses for a private equity firm in a single deal.

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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• Credit/Special Situations
• CVC Capital Partners
• Distressed
• TMT
• Australia