In October 2012, Australian media giant Nine Entertainment Company (NEC) was in the midst of a major debt renegotiation that would determine whether the company received a renewed chance to survive and thrive or faced a long and potentially costly insolvency proceeding. Six years earlier, private equity firm CVC Partners (CVC) had taken a controlling position in NEC, culminating by 2008 in one of the largest leveraged buyouts (LBOs) in the Asian market. Now, due to declining revenues in the Australian media markets in which it operated, NEC was in jeopardy of defaulting on its senior secured debt. A large portion of the senior secured debt was owned by Apollo Global Management (Apollo) and Oaktree Capital Management (Oaktree), two large alternative investment funds that specialized in managing—and often taking over—companies in financial distress. Apollo and Oaktree prepared to face off against NEC's CVC owners—as well as holders of NEC mezzanine debt, dominated by a credit arm of Goldman Sachs—in what could culminate in a costly restructuring process and bankruptcy filing. In the middle of the negotiations was David Gyngell, NEC's CEO and son of the famed Nine Network TV broadcaster, Bruce Gyngell. What were his options? Could he facilitate a consensual agreement across the varied investors representing the debt and equity holders in this case? Or would NEC be forced to file for the Australian version of a bankruptcy proceeding?
This case is appropriate for graduate or undergraduate students with an introductory background in finance. It enables students to learn from a real-life case about a variety of relevant topics, including the Australian media market, the Asian LBO market, and restructuring options in industrialized economies outside the United States.