MediaWorks NZ, the broadcaster whose banking syndicate is poised to take control, owed its lenders $528.3 million when they tipped it into receivership, according to the first receiver's report.
The Auckland-based company held total liabilities of $797.4 million against assets of just $329 million as at May 31, of which its banking syndicate was owed the bulk, receivers Brendon Gibson and Michael Stiassny said in their first report. The new capital structure, which will give the lenders ownership, plans to cut the company's debt to less than $100 million.
The receivers said $4.7 million owed to staff as preferential creditors and $4.2 million owed to the Inland Revenue Department will be paid in full.
The debt has grown since August 31 last year when outgoing holding company GR Media reported total borrowings of $496.7 million, including $176.8 million in subordinated and payment in kind shareholder loans.
Last week Gibson and Stiassny signed a conditional sale and purchase agreement with the new holding company for the broadcaster.
The new structure will leave US private equity firm Oaktree Capital as the biggest shareholder with 26.7 per cent. Lender RBS will hold 21.9 per cent, private equity firm TPG Capital 15.7 per cent, Westpac Banking Corp and Rabobank each will hold 14.6 per cent, and JP Morgan will hold 6.5 per cent.
The deal is expected to settle on Sept. 30, and will transfer the broadcaster's assets 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.
The receivership ended Australian private equity firm Ironbridge's involvement in the business since its debt-funded purchase of CanWest's 70 per cent stake in 2007 valuing the broadcaster at some $741 million.