John Drinnan

John Drinnan is the Media writer for the New Zealand Herald.

Fast handover tipped for MediaWorks

MediaWorks insiders say broadcaster's receivership could be done within a month.

Michael Stiassny, left, here with KordaMentha colleague Brendon Gibson, has indicated the MediaWorks tax issue will be left behind. Photo / Dean Purcell
Michael Stiassny, left, here with KordaMentha colleague Brendon Gibson, has indicated the MediaWorks tax issue will be left behind. Photo / Dean Purcell

KordaMentha, the receivers for MediaWorks, could hand over control to a new firm by the end of next month, according to insiders.

The new company, which will run TV3 and half the country's radio stations, is chaired by Rod McGeoch.

Former reality TV queen Julie Christie will play a big part in the television arm of the firm and has already been seeking renegotiation of TV3's programming deal with Fox TV.

A third director, Australian media executive Martin Dalgleish, will provide expertise for TV3's struggling new media arm.

Two MediaWorks sources said indications were the receivership might only last one month, but one said staff were wary of complications. TV3 spent a long time in receivership in 1990, five months after it started.

KordaMentha declined to speculate about when the new owners - controlled by out-of-pocket secured lenders - would take over.

Receivers and management said it was "business as usual".

The $600 million write-off of debt by the media company's banks has made the broadcaster much more viable.

Staff are buoyant but many expect upheavals under the new regime.

Speculation continued yesterday about the payment of a potential $22 million bill to the Inland Revenue Department.

Labour Revenue spokesman David Cunliffe said he would be keeping "a close watch" to ensure the Government did not get involved in the tax issue, as it had in the past to help MediaWorks secure radio frequencies.

Auckland University senior lecturer in tax Mark Keating doubted the receivership would kill off potential obligations to the IRD.

He predicted there would be an "eye-to-eye" negotiated settlement between the receiver and IRD, with IRD accepting a portion of any amount judged to be owed.

Receiver Michael Stiassny indicated the tax issue would be left behind with the company going into receivership and MediaWorks, which has set aside $22 million in its books, still challenges the legal claim.

MediaWorks is seeking leave to take a Court of Appeal upholding of the IRD case to the Supreme Court.

Typically people think IRD commitments are first in line for repayment in receiverships but Keating said IRD was not a preferred creditor over the banks whose investments were secured.

"There is a provision in the Income Tax Act which allows an Inland Revenue commissioner to compromise on collections," Keating said.

"In big corporate situations like with MediaWorks ... there is pressure to make those compromises."

- NZ Herald

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