NEC and its lenders intend to implement the restructure through schemes of arrangement to be implemented over the next 3 months.
Funds managed by Oaktree and Apollo, NEC’s two largest senior lenders (who have advised they are negotiating on behalf of 75% of the outstanding senior debt), as well as Goldman Sachs Mezzanine Partners (representing 80% of the mezzanine debt), have confirmed that they support the terms of the restructure. Full details of the restructure will be contained in the scheme booklets which are expected to be lodged with ASIC in late November.
As soon as the restructure is effected, all the existing senior and mezzanine debt will be converted to equity and the Group will have no debt. In exchange for cancellation of existing senior and mezzanine debt, senior lenders will collectively receive 95.5% of the equity in the Group with mezzanine lenders receiving the remaining 4.5%.
Announcing the breakthrough deal, Peter Bush, Chairman of NEC, said: “We believe this is an outstanding outcome for all stakeholders. The business has great momentum and strong cash flow, and now it will have the strongest balance sheet in the industry. It puts the company in a remarkable position to build on the successes of 2012.”
Mr Bush said the trading and operating activities of Nine Network and Ticketek continue as normal. Customers, employees and business partners of both businesses will be unaffected by the restructure.
David Gyngell, Chief Executive Officer said: “Nine’s back! And back in a huge way with zero debt, which is the best possible news for our stakeholders – Nine’s viewers, our clients, our partners and our staff. As I’ve reiterated throughout this process, Nine is a great business with terrific people and outstanding brands.
“This historic agreement positions us for unrivalled leadership and I cannot wait to lead the Group into an exciting 2013 and beyond.”
Mr Gyngell paid tribute to Peter Bush, his team at NEC, and their advisors Macquarie Capital and Gilbert + Tobin who have been extraordinarily helpful working through a very challenging period, and acknowledged the support of CVC Asia Pacific throughout the process.
“It’s been a long and often tortuous process and to all the parties I say a big thank you - because the outcome is the best imaginable result” he said.