Nine CEO David Gyngell has talked down comments about debts that surround Nine Entertainment Co.
It follows predictions from Seven’s Kerry Stokes that Nine could be owned by banks within a year.
“It’s always sad to see a competitor in financial difficulty. And obviously they are in financial difficulty,” Stokes said after Seven Group’s annual meeting in Sydney.
Nine Entertainment, which includes Channel Nine and ACP Magazines, was bought by private equity firm CVC Asia Pacific in 2006 and has amassed some $3.66 billion of debt due to be refinanced between 2013 and 2014. Earlier this week the Australian Financial Review reported that Nine auditors warned that a deterioration in its performance during 2011-12 could force the group to pull forward a key refinancing.
Ernst & Young said there were doubts about its ability to continue as a going concern unless it was able to repay or renegotiate $975m of debt due in 2014.
Nine posted EBITDA of $400.8 million in 2010/11, according to a report of the company’s accounts in the AFR.
But Gyngell told media the company’s debt was a matter for shareholders, not management.
“Clearly, there are some shareholder challenges and shareholders are going to have to sort those challenges out,” he said.
“You don’t have to be a rocket scientist to work out Channel Nine will still be going to air in one year, two years, three years time, no matter who are the owners.
“My role will be to ensure I protect those businesses to the best of my ability.”
Nine spokesman David Hurley said: “We won’t die in a ditch over anything Kerry Stokes says. Of course he will say this – it’s all a bit of shadow boxing”.