John Drinnan: Why receivership for TV3?

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Julie Christie arriving at the NZ TV Awards last year. Christie and Rod MccGeoch are on the board of the new company that will take over the old MediaWorks from receivers. Photo / Neville Marriner
Julie Christie arriving at the NZ TV Awards last year. Christie and Rod MccGeoch are on the board of the new company that will take over the old MediaWorks from receivers. Photo / Neville Marriner

As TV3 and MediaWorks heads into another period of upheaval the question is why its bankers used receivership to restructure the firm.

The Herald has been forecasting restructuring of MediaWorks most of this year and on Friday tipped a major announcement this week.

The banks' decision to put the company in receivership means the company clears the decks, effectively writing off $600 million and reducing the onerous interest loading.

That will mean that equity holders like Ironbridge Capital and Ironbridge and Goldman Sachs will take a big hit, that was always going to be the case in any restructure of the firm.

But other debt holders such as Texas Pacific Group and Oaktree Capital Management - who bought out debt as part of a back-door takeover - had been working with banks for some time on a plan that would not have involved the intermediary step of receivership.

By all accounts the operations of the firm will not be affected, staff and suppliers will not be out of pocket.

But the big question will be the shape of this new company, Newco, that is planned to take over from receivers and will be headed by Rod McGeoch and with Julie Christie on the board.

Then question is whether Christie - who has recently sold her stake in production company Touchdown Television - will take a financial stake and what are the interests that new chairman Rod McGeoch represents?

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John Drinnan has been a business journalist for twenty years, he has been editor of the specialist film and television title "Screen Finance" in London, focussing on the European TV and film industry. He has been writing about media in New Zealand since the deregulation of the television industry in the late 1980s.

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