Mediaworks NZ writes down goodwill
MediaWorks has written down the value of its goodwill, in a capital structure that includes a US private equity investor holding $125m of its debt.
11 August 2012
MediaWorks NZ has written down the value of goodwill by $241.6 million in a capital structure that includes US private equity investor Oaktree Capital Management holding a chunk of its debt.
The broadcaster's stable includes TV3 and Four, and radio stations including the Rock and MoreFM.
The group's holding company, GR Media Holdings, posted a loss of $305.6 million in the year ended August 31, 2011, compared to a loss of $50.5 million a year earlier, MediaWorks said in a statement.
Earnings before interest, tax, depreciation and amortisation fell 12 per cent to $44.2 million, with revenue relatively flat at $241.6 million.
Oaktree bought $125 million of the broadcaster's debt at a reported discount of 50 per cent, according to the Australian Financial Review.
The US private equity firm also owns debt associated with troubled Australian media group Nine Entertainment.
"The board of GR Media Holdings Ltd consider this a positive development which will assist in the speedy resolution of the pending debt restructure," it said, referring to Oaktree's acquisition.
MediaWorks' writedown comes as Australian private equity owner Ironbridge Capital teamed up with former rival TPG Capital to put forward a restructuring proposal to its senior lenders, and an announcement is expected to be made before the end of the year, it said.
"All stakeholders - including senior lenders, Ironbridge and TPG - remain fully supportive of the company, its staff and management."
The restructure will see MediaWorks shuffled into a new holding company for a second time, a write down in the value of its existing debt, new finance facilities provided and a lending covenant terms established.
The recapitalisation will also satisfy a $43 million debt owed on its spectrum licence.
"Interest costs will be significantly reduced and the funding structure will In June, the broadcaster said it planned to spend more on local television programmes as it winds down its deal with CBS Broadcasting and stops taking new shows from the most-watched network in the US.
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