Ironbridge lands $50m top-up

Ironbridge Capital is claiming victory in keeping rival TPG out of MediaWorks and protecting its stake in the broadcaster that owns TV3 and RadioLive. Last night Ironbridge founding partner Paul Evans announced a restructuring deal that pumps $50 million into MediaWorks. It reduces interest by about $20 million a year and secures banker support for three more years. The deal would see Ironbridge paying off the $30 million remaining from a controversial $44 million, 50-month loan by the Crown, a deal that enabled MediaWorks to secure its radio frequencies during tough times after the global financial crisis. MediaWorks owns TV3, Four, and controls half the commercial radio industry including RadioLive, The Rock and Mai FM. Evans is confident the restructuring - negotiated alongside a takeover bid by TPG - has seen off Ironbridge's private equity rival. However there are signs the restructuring deal may not be quite watertight yet and TPG may have a few more days to turn bankers. TPG has been attempting a back-door takeover, buying up senior debt at a discount which could eventually have led to Ironbridge and second-tier debts being ousted from the firm. If successful, such a deal would have cost Ironbridge dearly. Bankers - led by BNZ - had considered approaches from TPG. Evans said bankers had chosen the Ironbridge proposals over those of TPG and its consultant Brent Impey. The Herald revealed yesterday that Impey, a former chief executive of MediaWorks who left in the last restructuring, was a consultant to TPG. Evans said Ironbridge had been aware of that relationship for two weeks. It is understood that TPG is not accepting defeat. The private equity firm has time to approach bankers again. The interim before the play by TPG is over - one way or another - means more uncertainty for MediaWorks staff, many of whom have been aware of repeated three-month cycles in Ironbridge negotiations with bankers as it sought to keep within banker convenants. In theory, a TPG takeover shutting out Ironbridge and second-tier investors might have made a big impact reducing MediaWorks' debt loading and interest payments. That might be beyond the $20 million of savings from the restructuring of debt. But the actual numbers of the TPG approach to bankers - and their effect on the interest burden - have never been laid out publicly. Ironbridge depicts the restructuring as bringing stability to the company. "The purpose of this recapitalisation is to provide funds for investment in the growth of the business in areas such as local programming, promotion and sales," Ironbridge said. "Recapitalisation will ... provide a liquidity buffer and place the business on a sound footing to move forwards. "Ironbridge hopes that the disruption and uncertainty that has been generated over the last few months can now be put aside in the interests of staff and stakeholders." Ironbridge gives the MediaWorks management team headed by Sussan Turner a vote of confidence, saying they have worked hard to ensure the business continues to punch above its weight in a very competitive media environment. "Strong support from the majority of funders is a great endorsementof this commitment and a realvote of confidence in the business," Ironbridge said. Presumably that majority of funders does not include TPG, which bought 20 per cent of debt in discounted deals. It is not clear if there are other senior debt holders who have not backed Ironbridge's plan.