Oaktree lifts holding in Mediaworks, buys out bankers stakes

Wednesday 29th April 2015

US hedge fund Oaktree Capital has lifted its stake in Mediaworks Investments, the free to air broadcaster of the TV3 network, to own more than three quarters of the company after taking up two banks' stakes in a development that should assist plans for its eventual sale.

Los Angeles based Oaktree, which manages more than US$99.9 billion in assets, lifted its stake, via investment vehicle Tokyo Opportunities B.V., to about 78 percent, after it bought Westpac New Zealand's 22 percent stake and the Royal Bank of Scotland's 15 percent holding, according to filings lodged with the Companies Office.

In 2012, Oaktree emerged as a debt holder in MediaWorks, buying $125 million of the media group’s debt at a reported discount of 50 percent. At the time, then owner Ironbridge was coming under pressure from rival private equity firm TPG Capital, which had also bought a chunk of MediaWorks’ debt. Companies Office records show TPG still holds 16 percent, while Cayman Islands based Minot Light APAC holds 6.5 percent.

Oaktree lifted its stake to 43 percent in November 2013, taking on Rabobank’s 14.6 percent stake, the same day Mediaworks' lenders completed their recapitalisation of the media group, which had been placed in receivership, reducing the company’s debt levels to about $100 million from more than $700 million beforehand.

In February, Mediaworks posted a profit of $12 million in the 10 months and 22 days ended Sept. 30, on sales of $246.9 million while costs were $221.8 million over the trading period. That was the first financial report for Mediaworks since the November 2013 recapitalisation of the company.

Last August it appointed Mark Weldon, former NZX boss, as chief executive, fuelling speculation the business is being readied for an initial public offering. The 2014 financial statements show the board and senior management have been issued shares as part of an incentive compensation scheme, which will be triggered on an "exit event".

Weldon told Fairfax Media earlier this month that "the equity holders in the business are not companies that generally are in the media for the long term, so they want to exit at some point", although there were "no market buyers out there" at present.

At balance date the company had $353.9 million in assets, with $31 million in cash, while liabilities were $147.2 million.

BusinessDesk.co.nz

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