The chances of a stable future for TV3 owner MediaWorks have been given a boost by the arrival of a new investor.
The Oaktree Capital Management, a United States-based private equity company that specialises in investing in distressed assets, has bought $125 million of MediaWorks' debt from BOS International and BNZ at a big discount to its face value, sources close to the transaction said.
The restructuring of the debt which has had several false starts has a better chance of success now that the two banks have been bought out, the sources said.
US-based private equity giant TPG and MediaWorks' owner, Sydney-based private equity company Ironbridge, have in the past been at loggerheads over how to restructure the company, but they appear to have patched up their differences.
Ironbridge bought MediaWorks, whose assets include TV3, RadioLive and More FM, for $741 million in a leveraged buyout in 2007 - just before the onset of the global financial crisis.
TPG and Ironbridge last month put forward an arrangement that involved a significant cash injection to pay off a $30 million spectrum loan to the Government and to fund programming and sales initiatives.
The package included a material reduction in debt levels and a cash injection of $50 million.
But APNZ understands that when the proposal went to MediaWorks' senior lenders, BOS and BNZ decided to cash in their chips.
TPG bought about $70 million of MediaWorks from the Commonwealth Bank of Australia last year.
"Now, with Oaktree having taken out some debt, it paves the way for that restructuring of MediaWorks debt to take place, so it is a positive development because it takes out two banks, who may have had different views on it, and gives the restructuring plan a greater chance of happening," said one source. "So now, all the parties are there because they want to be in there."
About half MediaWorks' debt is now in the hands of the three private equity companies.
The Australian Financial Review said the purchase made Oaktree - which is on track to snap Australian media giant Nine Entertainment from global private equity firm CVC Asia Pacific - the biggest member of Mediaworks' $388m syndicated facility.
The AFRsaid the Oaktree purchase was at a 50 per cent discount to the face value of the debt, but sources could not confirm to APNZ the price paid.
- APNZBy Jamie Gray Email Jamie