Australia's 9 Entertainment dodges default

Struggling Australian media empire Nine Entertainment fell into the hands of US hedge funds Wednesday as part of a last-ditch deal over its Aus$3.3 billion (US$3.4 billion) debt. Nine had been on the verge of default, owing $2.3 billion to US hedge funds Apollo Global Management and Oaktree Capital and a further Aus$1 billion to investment bank Goldman Sachs. But a relieved chief executive David Gyngell emerged from a meeting of creditors in Sydney to announce that "there is a deal", with the US trio agreeing to swap all debt for 100 percent equity in the media firm. "We have a fully capitalised business," Gyngell said of the company that runs Australia's oldest commercial television channel, the Nine Network, as well as other TV and radio stations and online assets. "All those doomsayers out there are going to have to eat their words. "We have never had a more powerful balance sheet. We are ready to rock and roll for next year," added Gyngell. Nine said the "landmark agreement" -- the full details of which will be presented to Australia's corporate regulator next month -- would see Oaktree and Apollo take 95.5 percent of Nine and Goldman Sachs the other 4.5 percent. "We believe this is an outstanding outcome for all stakeholders," said Nine chairman Peter Bush, describing recent days as a "very challenging period" for the firm. "The business has great momentum and strong cash flow, and now it will have the strongest balance sheet in the industry." Bush said the "breakthrough" deal would not affect Nine's customers, employees or partners, saying business would go on as usual. Had the company been unable to secure an agreement it faced being placed in administration because it would be unable to service its debt. Previously known as PBL Media and part-owned by the Packer media family, the company rebranded as Nine Entertainment in 2010. It sold off its struggling ACP Magazines stable to Germany's Bauer Media Group last month in a bid to trim its debt obligations and make itself more attractive to investors. The firm was linked earlier this year to Hollywood magnate Harry Sloan, the former chair of MGM Studios, who was reported to be interested in a takeover that would see Nine refinanced and listed on the Nasdaq.