Super-dad David Gyngell saves Nine
Updated: Lenders agree to a deal to save Channel Nine from administration, just hours after David Gyngell becomes a new dad.
- Published by David Knox
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- Filed under News, Top Stories
From a hospital bedside to board room meetings with just an hour’s sleep in between, David Gyngell has become a father and managed to rescue Nine from administration.
Lenders have agreed to a deal that leaves the company debt free just hours after the birth of his son Edmund, to Leila McKinnon.
The deal was announced by Gyngell outside a meeting with the media company’s lenders in Sydney.
“Channel Nine’s back,” he told reporters. “[It] is going to be a debt free company which makes it the most powerful media balance sheet in the country.”
Senior lenders will own a 95.5 per cent stake in Nine and the Goldman Sachs-led Mezzanine lenders, who faced losing the entire $1 billion they had invested in second-ranked debt, will receive a 4.5 per cent stake valued at around $100 million.
“All the doomsdayers out there will have to eat their words,” Gyngell said.
“We’ve never had a more powerful balance sheet.
‘‘We are ready to rock and roll for next year.’’
That will be a story to tell the kids, one day…
Press Release:
The Nine Entertainment Co. (NEC) Group today reached a landmark agreement with representatives of its senior and mezzanine lenders for a restructuring of its financing arrangements.
NEC and its lenders intend to implement the restructure through schemes of arrangement to be implemented over the next 3 months.
Funds managed by Oaktree and Apollo, NEC’s two largest senior lenders (who have advised they are negotiating on behalf of 75% of the outstanding senior debt), as well as Goldman Sachs Mezzanine Partners (representing 80% of the mezzanine debt), have confirmed that they support the terms of the restructure. Full details of the restructure will be contained in the scheme booklets which are expected to be lodged with ASIC in late November.
As soon as the restructure is effected, all the existing senior and mezzanine debt will be converted to equity and the Group will have no debt. In exchange for cancellation of existing senior and mezzanine debt, senior lenders will collectively receive 95.5% of the equity in the Group with mezzanine lenders receiving the remaining 4.5%.
Announcing the breakthrough deal, Peter Bush, Chairman of NEC, said: “We believe this is an outstanding outcome for all stakeholders. The business has great momentum and strong cash flow, and now it will have the strongest balance sheet in the industry. It puts the company in a remarkable position to build on the successes of 2012.”
Mr Bush said the trading and operating activities of Nine Network and Ticketek continue as normal. Customers, employees and business partners of both businesses will be unaffected by the restructure.
David Gyngell, Chief Executive Officer said: “Nine’s back! And back in a huge way with zero debt, which is the best possible news for our stakeholders – Nine’s viewers, our clients, our partners and our staff. As I’ve reiterated throughout this process, Nine is a great business with terrific people and outstanding brands.
“This historic agreement positions us for unrivalled leadership and I cannot wait to lead the Group into an exciting 2013 and beyond.”
Mr Gyngell paid tribute to Peter Bush, his team at NEC, and their advisors Macquarie Capital and Gilbert + Tobin who have been extraordinarily helpful working through a very challenging period, and acknowledged the support of CVC Asia Pacific throughout the process.
“It’s been a long and often tortuous process and to all the parties I say a big thank you – because the outcome is the best imaginable result” he said.
Source: NineMSN, smh.com.au
38 Responses
Yay go Nine!
Also, congrats to Gyngell on the baby! What a week it must’ve been!
This is great news for Nine. Pity some just want to attack the network in any way possible. Don’t forget Seven and Ten went through similar problems 20 odd years ago. Hope Nine can prove the critics and haters wrong. Dave Gyngell has done the best job he can and to some, sounds arrogant but don’t forget it must be stressful for him considering his company is under financial pressure and he has a new baby too so obviously a stressful time for him.
NRL rights have been brought up. Seven’s AFL coverage is just as good. There are still delays and its worse in Perth. I believe they have 90 minute delays on Friday nights yet Gem airs NRL live at 5:30pm. If 7 had NRL, it would still have a delayed Friday game and the Sunday arvo one too. I think Ten would air the 3pm game live though if they had it. 7 have a bigger focus on AFL and tennis. The NRL could work on 7 but it could hurt them in the long term afterall it costs money to broadcast sport.
Yeah he sounds arrogant.
So now Nine has US “investors” who will only be interested in one thing -making lots of profit. Seems CVC lost everything. An excellent report on “7:30”. Kerry sold to Alan Bond at a price he couldn’t refuse. Likewise James sold to CVC at an absurdly high price. All on borrowed money, both times. Watch for the cost-cutting now.
I think Gyngells comments today sum up the general arrogance of the man,when asked about the result he commented that not all the parties were happy but at least he was.
Could this lead to more cuts or a further shift from Drama shows to more reality TV?
I’m better Nine will be under tighter control now on what it can do and spend on new programing.
The Nine group is no worth half of what it was just a few years ago, how long did it take for them to rack up such a high debt?
Yeah a powerful balance sheet now! Just wait.
Congratulations for both outcomes. I wish his family well and hope everyone gets much needed rest. Because it will be needed with a newborn.
He comes across a little arrogant. I wouldn’t be bragging about having a “a debt free company which makes it the most powerful media balance sheet in the country” too quickly. There is a reason they were in the debt they were.
@Josh777
I agree. 5 more years of crappy Rugby League coverage.
I know they are debt free but how the hell does $3bn just disappear? That is what doesn’t make sense to me. I’d like to know more details. Oh btw Gyngell is a fool to think this is forward from here. New owners means new management and a new way of doing things so if he thinks this is smooth sailing he is the fool here.
Super Dad? I think Mum did most of the work in that regard 🙂
Is nobody a little concerned they named their son ‘Eddie’? LOL!
Completely agree Josh777. So damn close.
More cocky Gyngell! God help us! the only one going to eat their words will be you.
The real interest is what this means for Nine’s board. Giving up my debt for equity means I would want a seat on the board (in fact, several seats depending on how much of the company I now own). I love it when private equity firms take over entertainment businesses.
@dshan: my thoughts exactly.
They may be financially stable for a while but the keys to the kingdom have been handed over to new owners and there’ll undoubtedly be a new set of bottom-line focussed rules, new management structure and a new culture on its way. Out with the old, in with the new.
@Dshan – CVC were stooges and deserved what they got IMO (they agreed to inherit the debt from Packer in the first place as the debt largely wasn’t incurred by Nine itself).
I don’t see any evidence that Nine would be running a cheap reality based schedule in the future without any debt on their books..?
Game on!
So he’s basically had to hand over the company to it’s creditors, the current owners have lost the lot.
They stay on air, but the company has effectively changed hands and all profits now go to it’s former creditors. And as the new owners they now call the shots re programming budgets, staffing levels, pay, etc. Bet they’ll be looking to recoup their losses as quickly and cheaply as possible. Lots of cheap reality shows in Nine’s future I’d say, and not much local drama, or local anything probably.
Still, it’s nice to see Goldman Sachs group have to eat a $900M turd burger.
Congratulations to Nine and especially David Gyngell. Must be the best day of his life. I know that there were a lot of critics including people who wanted him out but he’s proven them wrong.
So who will be playing Gyngell in the new telemovie? Are Rob Carlton & Lachy Hulme free?
How is he a “super-dad”?
It will be interesting to watch Nine’s resurgence now that they have this load off their back.
Not having to worry about money means they can concentrate on chipping away at Seven.
Gyngell is right about the critics having to eat their words.
Gyngell (Snr) was the first person to appear on Australian TV and his grandson was born on the day his son saved the network.
That’s gotta go down in TV history…
Damn so close to the NRL rights being sold off to networks that would actually give it the time of day >.< Heres to five years of delayed telecasts in standard definition =(