Nine saved by deal
Birth and rebirth ends funding crisis
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.