MediaWorks set to change hands as new player flexes muscles

Australian private equity firm Ironbridge is likely to lose control of MediaWorks after TPG Capital launched a bid to take over the troubled broadcaster's debts.

The Australian Financial Review today reported TPG Capital, one of the world’s largest private equity firms, had acquired $70 million of debt owed by MediaWorks to the Commonwealth Bank of Australia. The deal makes TPG the largest individual lender to the ailing media company.

Terms of the deal were not disclosed, but the National Business Review understands the debt was acquired for 70c in the dollar. Five months ago Allied Irish reportedly sold its MediaWorks debt for 63c.

Ironbridge is widely considered to have overpaid when it acquired the company in 2007 for $721 million. The global financial crisis and short-term demands to service $562 million of debt have put pressure on MediaWorks’ earnings and ebita is understood to have slid below $40 million,

MediaWorks operates free to air channels TV3 and TV4 and a suite of radio stations including Radio Live and The Rock.

The NBR understands the CBA buyout – giving TPG 20% of senior debt owed by MediaWorks - is the first step in plans by the Texas-based firm to take over the company.

Negotiations with other lenders including and the Bank of New Zealand, Westpac, the Royal Bank of Scotland, BOSI and Goldman Sachs are expected to commence in the New Year.

TPG is understood to have sounded out the government over its plans and the Crown's $42.3 million loan to Mediaworks to cover radio broadcast licences will not be subject to any haircuts.

TPG have a modest presence in New Zealand, but has been more active across the Tasman and last year led a $A2 billion recapitalisation of utility Aline Energy last year.

The Alinta deal, where the company’s debt loading was slashed in half in preparation of the company being resold in the next three to five years, may be a guide as to the Texas firms' plans for MediaWorks.

 

TPG made headlines in Australia earlier this year after tax authorities stepped up a $A739 million claim against the company related to the private equity's channelling of $A1.5 billion offshore following the sale of Myers. However, an Australian court decided the Australian Tax Office action had no basis and the matter has not progressed.

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What is wrong with New Zealanders????

Here's a golden opportunity to buy back some NZ assets cheap but like AMI, it's foreign interests buying again!

Oh, I forgot - New Zealanders have no money and there's no stink because the buyers are white-skinned.

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Spot on bro', but who are TPG indebted to- could be the asians bro'- we win anyway coussie.

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You would have thought that TPG would have wanted to buy all the senior debt at the same time, as the price to buy the rest will have just gone up...

OR - maybe they actually want to tip it into receivership with a relatively small amount of debt and then get the large discount that way around when they buy it from the receiver...vulture capitalism at its best/worst (depending on who you are in this jigsaw).

Either way Ironbridge has lost all its dough - its a miracle Kerry McIntosh still represents them given all the overpriced deals he's tipped them into...

And Guyon Espinar might have moved a bit quickly

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Can NBR tell us if mediaworks have paid back the loan ( was it $48million? ) to the govt. that Steven Joyce approved to cover Mediaworks unpaid licences?
Will or has the taxpayer got that back or is it small change compared to the $1.7 billion the govt guaranteed a small number oF Sth Canterbury Finance company's depositers

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Hang on! You state that this govt is more savvy than previous ones?

Explain then why even non-guaranteed debt in SCF was bailed out by the Key government?

Something smells very very fishy.

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I do not defend the govt on this.
But yes, if you are referring to the way they are going about their MOM program and the rules they are setting for that. Yes they are a whole lot more savvy than Labour was in its 100% provatisations in the 1980's using for e.g. fay richwhite on both sides of deals etc.
I don't hold a candle for national nor Labour. I try not to be an idealogue. I try to consider things rationally and even then i get it wrong. But I am not a blind follower of anything. cheers.

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Alasdair Thompson - Think $43mil? & Devious Key.

Appears many would like answers but still looking for a journo that will "do the mileage". Bit stuffed now re SCF due to court charges.

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Alasdair - I beleive the loan is for the term of the license. I assume they have to prepay, or at least not go to far in arrears, or else they can no longer broadcast. would be interesting to have this confirmed.

Devious - I beleive it got paid out because it would have ranked above the govt as far as repaying the govt guarantee payment. They therefore paid out to non secured so that they had full control of the process as they knew there would be more than enough to recover the payments to non secured creditors. Not everything is a conspiracy.

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Harvey Spectar - How do you go from $350 [my lips are sealed] to $700mil, then $1.2billion [informed now about $1.7bil] in 3 1/2 years??????
That's right, court charges laid!

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The best thing that could happen to MediaWorks is to get rid of the senior mismanagement team

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