Back from the debt

Nine chiefs deliver survival hope with deal

CHANNEL 9 is on the verge of being saved from oblivion with major lenders last night closing in on an 11th-hour deal.

During tense negotiations it is understood Nine chief executive David Gyngell and chairman Peter Bush pulled together a deal that could result in second-tier lender Goldman Sachs taking a smaller stake in the network.

This could finally get US hedge funds Oaktree Capital and Apollo Global Management to sign up to a plan to carve up the company’s $3.2 billion debt.

Nine’s future i s being decided by the two groups of lenders, with the hedge funds fighting for as much control of Nine as they can get.

A source last night said Goldman Sachs and other minor stakeholders would receive about $110 million.

The move will quash receivership fears at the network as failure would force directors to pull the plug.

‘‘We’re fighting hard to save a great business,’’ Mr Gyngell said last night.

‘‘ I think we’ll have some sort of outcome to discuss (today)’’, adding the negotiations had been a ‘‘vigorous debate’’ around valuation.

Sources close to Goldman Sachs said last night: ‘‘We’re quietly confident the announcement will be made later today.

‘‘Both Nine and the hedge funds know it’s in their best interests to come to an arrangement, or else they’ll be one step closer to the network going belly up.’’

If the two groups cannot finalise a deal soon, the media group’s directors, including Gyngell, could be forced to call in the corporate undertakers — or face being made personally liable for its debt.

Nine’s precarious predicament has nothing nothing to do with its performance— the business will still report underlying earnings of about $250 million for the financial year just ended.

But Nine has struggled since being saddled under a $4 billion debt loaded on to it by CVC Asia Pacific when it acquired the business from James Packer in 2006.

With 85 per cent of Nine now set to be in the hands of foreign hedge funds, analysts have questioned what will remain of the network that, in its heyday, swept aside all in its path.

But Nine still faces losing assets such as its cricket coverage, experts say.

Nine paid $315 million over seven years for rights to Tests, one-day internationals and Twenty20 internationals in Australia.

The contract expires this summer.

‘‘With less money to spend under new owners, that does open the door for Seven or Ten to outbid Nine,’’ Fat Prophets media analyst Greg Fraser said.

Also in the firing line could be Nine’s top-rated programs.

The Big Bang Theory, Two and Half Men and The Mentalist are not expected to face any immediate chops, but respected media analyst Peter Cox said the deal could affect them as production deals were renegotiated.