MediaWorks’ lenders a step closer to taking control of ailing broadcaster
The lending syndicate to broadcaster MediaWorks NZ is a step closer to taking control, two months after tipping the company into receivership.
Receivers Brendon Gibson and Michael Stiassny of KordaMentha have signed a conditional sale and purchase agreement with a new holding company for the broadcaster, they said in a statement. The new structure will see US private equity firm Oaktree Capital emerge as the biggest shareholder with 26.7 percent. Lender RBS will hold 21.9 percent, private equity firm TPG Capital 15.7 percent, Westpac Banking Corp and Rabobank each will hold 14.6 percent, and JP Morgan will hold 6.5 percent.
The deal is expected to settle on Sept. 30, and will see the broadcaster's assets transferred to a new company chaired by Australian businessman Rod McGeoch. Former Eyeworks Touchdown boss Julie Christie, best known in New Zealand for a string of reality TV series, and ex-PBL director Martin Dalgleish will join him on the board.
"At the outset of the receivership, we focused on ensuring a swift transition of the business to a new owner to provide certainty for the management team, staff, customers and suppliers," Gibson said. "Today's announcement is an important milestone toward selling and transitioning the business."
The June appointment of the receivers was to oversee a restructuring plan where the broadcaster's assets would be placed in a new entity owned by the debt holders, though they were obliged to entertain any bids.
The deal ended Ironbridge's involvement in the business since its debt-funded purchase of CanWest's 70 percent stake in 2007 valuing the broadcaster at some $741 million.
The new capital structure will cut the broadcaster's debt to less than $100 million.
MediaWorks' outgoing holding company, GR Media, had total borrowings of $496.7 million as at Aug. 31, 2012. That included about $25 million of accrued interest, and subordinated and payment in kind shareholder loans of a further $176.8 million, of which $55.7 million was accrued interest.
The insolvency event also meant MediaWorks' $172.7 million in programme rights commitments over the coming five years were open to termination.