Nine saved by deal

Birth and re­birth ends fund­ing cri­sis

Geelong Advertiser - - BUSINESS BEAT -

YES­TER­DAY was a big day for Nine chief ex­ec­u­tive David Gyn­gell, mark­ing the birth of his son and the re­birth of his tele­vi­sion sta­tion.

Af­ter two days of grind­ing ne­go­ti­a­tions, punc­tu­ated by the ar­rival of Mr Gyn­gell and wife Leila McKin­non’s first child early yes­ter­day morn­ing, the re­lieved and rein­vig­o­rated- look­ing Nine boss strode out of talks in Sydney telling re­porters: ‘‘There’s a deal’’.

‘‘We have a fully cap­i­talised busi­ness,’’ Mr Gyn­gell said. ‘‘ All those doom­say­ers out there are go­ing to have to eat their words.

‘‘We have never had a more pow­er­ful bal­ance sheet. We are ready to rock and roll for next year.’’

Nine En­ter­tain­ment, the par­ent of the Nine Net­work, NBN Tele­vi­sion and the Tick­etek events tick­et­ing busi­ness, had faced go­ing into ad­min­is­tra­tion if lenders owed $3.3 bil­lion could not agree on how to di­vide up own­er­ship of the com­pany in re­turn for their debt.

Nine owed $2.3 bil­lion to US hedge funds Apollo and Oaktree and a fur­ther $ 1 bil­lion to in­vest­ment bank Gold­man Sachs.

The hedge funds’ debt falls due for re­pay­ment in Fe­bru­ary and Nine had no way to meet the call, mean­ing a debt-for-eq­uity swap was its only chance for sur­vival.

Gold­man Sachs, whose debt ranked be­hind that of the hedge funds in pri­or­ity f or re­pay­ment, in­sisted on an eq­uity stake as well.

Yes­ter­day, Mr Gyn­gell said Gold­man Sachs had re­ceived ‘‘a cer­tain per­cent­age of eq­uity’’ in Nine.

‘‘The rest of the com­pany will be con­trolled by the hedge funds,’’ he said.

It is un­der­stood the hedge funds will con­trol 95.5 per cent of Nine En­ter­tain­ment, while the so- called ‘ ‘ mez­za­nine lenders’’, led by Gold­man Sachs, take the re­main­ing 4.5 per cent. The deal val­ues Nine En­ter­tain­ment at about $2.3 bil­lion.

A source close to Gold­man Sachs Mez­za­nine Part­ners said de­tails were yet to be worked out.

HEY DAD: Chan­nel Nine chief ex­ec­u­tive David Gyn­gell leaves Citibank Build­ing in Sydney.

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