15 Aug 2013

Newly set-up company buys TV3, radio stations

8:54 pm on 15 August 2013

Receivers for MediaWorks announced on Thursday the company has been sold. MediaWorks owns TV3 and several radio station networks.

TV 3 logo

Photo: TV 3

Brendon Gibson and Michael Stiassny of KordaMentha said on Thursday the company had been sold to a new company MediaWorks Holdings Ltd, chaired by Australian businessman Rod McGeoch and supported by existing funders. The price was not disclosed.

MediaWorks operates TV3 and FOUR. RadioWorks, a subsidiary company, operates RadioLive, The Edge, The Breeze, More FM and others.

The company says it has reached an important milestone as it transitions from receivership to a new entity and its business is operating as usual.

AAP reports the new structure will see Oaktree Capital, a US private equity firm, emerge as the biggest shareholder with 26.7%. RBS will hold 21.9% and TPG Capital, another private equity firm, will have 15.7%.

Westpac Banking Corp and Rabobank each will hold 14.6% and JP Morgan will hold 6.5%.

Former Eyeworks Touchdown boss Julie Christie and ex-PBL director Martin Dalgleish will join Mr McGeoch on the board.

Brendon Gibson and Michael Stiassney, right, announcing the receivership in June.

Brendon Gibson and Michael Stiassney, right, announcing the receivership in June. Photo: RNZ

Settlement of the sale is expected on 30 September. AAP reports the new capital structure will cut the company's debt to less than $100 million.

Two months in receivership

MediaWorks was placed in receivership on 17 June. The company had $700 million of debt after Ironbridge, an Australian private equity firm, was caught out by the global financial crisis and could not afford to pay the interest on the debt. Ironbridge bought MediaWorks and its debt in 2007.

MediaWorks' outgoing holding company, GR Media, had total borrowings of $496.7 million.

On 17 June, Mr Gibson said the receivership process was a way to transfer the business to a new ownership and a new capital structure that was much stronger.

He said secured lenders - the banks - had agreed to reduce the debt to $100 million in return for a stake in the new company.

The Inland Revenue Department is refusing to comment on a disputed debt of $22 million with MediaWorks. Earlier this week Prime Minister John Key told reporters that sometimes debts are written off because they are disputed.

IRD declined to comment on the case following the sale announcement because, it says, of taxpayer confidentiality.