PE-owned MediaWorks New Zealand enters receivership

"For some time now, management has been working closely with our funders to settle on a structure that will enable MediaWorks to reduce its debt burden," Susan Turner, the company's group managing director, said in a statement. "The debt structure that was adopted when MediaWorks changed hands in 2007 was unsustainable after the global financial crisis."

Ironbridge bought MediaWorks from CanWest Global Communications and Brook Asset Management for approximately NZ$740 million (then $539 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 crisis.

The company holds NZ$388 million in senior debt and a NZ$15 million working capital facility, both of which are fully drawn, plus NZ$97 million in subordinated debt and NZ$24 million in payment-in-kind shareholder loans. Lenders include TPG Capital, which bought NZ$70 million in debt from Commonwealth Bank of Australia in December 2011.

KordMentha has been appointed to oversee the receivership of MediaWorks NZ and its subsidiaries, including RadioWorks and TVWorks. KordMentha's Brendon Gibson said that the company's creditors "have provided funding and are committed to the future of the business." He added that negotiations are well advanced to transfer the business to new ownership suitable for the long term.

According to Turner, MediaWorks' core business is strong and all divisions are trading well. 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. It employs 1,400 people.

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• Topics
• Australasia
• Financing
• Media
• Ironbridge Capital
• New Zealand
• Media
• TMT
• Leveraged finance