Private equity company Ironbridge has finally revealed the parlous state of TV3 operator MediaWorks, releasing accounts that show a mammoth $314 million loss for the year to August 31, 2009.

After being loaded with debts when bankers bought it in 2007, the media firm that owns TV3, C4 and several radio stations has had to shell out more than $91 million a year in interest.

Financial statements to the Companies Office show MediaWorks' holding company - HT Media Holdings - weighed down with the debt from Ironbridge's leveraged buyout in 2007.

The big bottom line loss includes a write-off of $258 million in goodwill - representing more than 30 per cent of the 2007 purchase price.

The $314 million loss compares to a $40 million loss for the previous year.

Financial details are historical with Ironbridge restructuring debt in December last year and changing the holding company to another company, GR Media.

Ironbridge says cash interest payments under the new structure are now lower.

Under its complex structure it is hard to know who owns how much of this high-profile media company.

Some investors owed money by HT Media swapped debt for equity and Goldman Sachs reportedly holds a 13 per cent stake.

Ironbridge insists that it - and the banks associated with it - still own more than half of the firm.

But even if the interest payment blow-out is historical, the statement to the Companies Office is sobering reading, highlighting the pressures facing the media firm.

It is a reminder of the impact from heavily leveraged deals at the height of the private equity boom in 2006 and 2007.

HT Media's earnings before interest, tax, depreciation and amortisation were $56.2 million, down from $66.6 million in 2008 so it was trading successfully in a depressed market.

An 11 per cent, or $31.8 million, fall in revenue during the unprecedented slump harmed attempts to boost its net profit.

Even without the fall in advertising revenue the firm would still have been hard pressed to make a profit while meeting interest demands.

Ironbridge spokesman Kerry McIntosh claimed a substantial drop in the interest payments now the media assets were constituted under GR Media.

He was comfortable with the way it was trading in the current market.

The financial results for HT Media raise questions about the price paid for the assets in 2007.

Private equity companies traditionally buy firms to sell on at a profit within five years.

In its third year there are few signs of a potential buyer or a profitable exit for Ironbridge.

Asked if Ironbridge could ever make a profit on the deal, he said: "We are facing a more difficult set of circumstances than we were at the beginning, but if the market continues to recover and we trade well we expect we will be okay."

Last year McIntosh was predicting significant movement in media ownership that has not occurred.

He said yesterday Australian media ownership had been stable as owners concentrated on amending their own capital structure.

Advertising spending in Australia was rebounding much more strongly than in New Zealand.

"The decreased interest burden combined with the slowly improving NZ economy [means] we are very comfortable with the way the company is trading and the headroom against various banking arrangements," he said.

Last week it was revealed that another media company - Yellow Pages - was looking at restructuring debt.

Yellow Pages was also bought by private equity at the height of the acquisitions boom.


Media Assets
* Mediaworks owns TV3, C4, The Rock, The Edge, RadioLive, More FM, Breeze, Solid Gold, Mai FM, George FM.

* In 2007 private equity firm Ironbridge paid $741 million for the company with a debt loading of more than $550 million.

* Advertising slumped in the recession and MediaWorks was weighed down with more than $91 million a year interest payments.

* Ironbridge last year restructured under new company GR Media.

* Ironbridge lodged annual financial results in the Companies Office for holding company HT Media in the year to August 31, 2009.