Impey to the rescue for Yellow Pages

Brent Impey is one of five directors appointed by the BNZ-led syndicate of bankers that controls Yellow Pages. Photo / Richard Robinson

Former MediaWorks chief executive Brent Impey is walking away from gardening leave into the $1.05 billion restructuring of directories firm Yellow Pages Group.

The company, bought for $2.24 billion in 2007, has now been valued at $750 million.

Impey left MediaWorks at the end of 2009 before owners Ironbridge Capital restructured debt.

Starting this week he will be on the board of another media firm - this one emerging from excessive debt.

Impey said the new role did not clash with his restraint of trade obligations, which run until March 31.

This week he started filling in as the RadioLive drivetime host while MediaWorks finds a replacement for Maggie Barry.

He is one of five directors appointed by the BNZ-led syndicate of bankers that controls Yellow Pages.

Creditors have taken a bath and will be seeking to extricate themselves from their investment.

The hope now will be that the remaining banks will be able to recover remaining debt.

Financial news website interest.co.nz has suggested the new valuation is significantly higher than a buyout proposal last year.

Yellow was bought from Telecom by Unitas Capital and Ontario Teachers Plan Board at the height of the boom in highly leveraged buyouts.

The price raised eyebrows internationally and was regarded by some as illustrating the folly of the period.

It was funded almost entirely from debt, leading to hefty interest bills.

By last March it was in breach of banking covenants.

Unitas and Ontario Teachers were hit with a huge writedown of goodwill.

Yesterday it was the turn of the banks to take the hit.

Under the new structure, Yellow Pages Group will be valued at one third of the $2.24 billion purchase price - made up of $500 million in restructured debt and $250 million capital notes.

The restructured firm will be chaired by former Yellow director Andrew Day, who has expertise in telecommunications online media, directories, advertising and investment.

He is a former chief executive of Telstra's Yellow and White Pages division Sensis, and also a former chief executive of the pan-European directory company Truvo.

Other directors include New Zealander Liz Coutts, Scott Pomeroy from Colorado and Paul Wilson of Sydney.

Day said the fundamentals of the firm in the directories market remained strong.

YPG Holdings filed its year to June 30 results on Christmas Eve showing that last March the group breached covenants on its debt facilities, although all senior interest continued to be paid.

The group's ebitda was $143 million, slightly higher than the $141 million reported for 2009.

But Yellow is facing more competition in the directories market with a new venture from NZ Post.

At June 30 last year the group's debt facilities totalled $1.8 billion, including $1.213 billion senior debt, $326 million subordinated debt and $268 million mezzanine debt. Subordinated debt has largely been written off.

Website interest.co.nz said it understood banks holding Yellow Pages debt after the restructure included BNZ, Deutsche Bank, Goldman Sachs and Barclays.

Day said the $750 million gave the firm strong long-term sustainability.

"We are focused on growth and increased profitability, and will be moving quickly to build on the strong operational fundamentals."

Yellow, formed in 1988, publishes the print, online and mobile directories for Yellow, as well as the White pages.