New Zealand's second largest free-to-air broadcaster MediaWorks has been placed into receivership this morning – a very strange arrangement that will see the company change owners and shed massive amounts of debt, without losing a single job.
Brendon Gibson and Michael Stiassny of KordaMentha, an accounting firm specialising in corporate restructures, have been appointed as receivers. Their responsibility is to sell MediaWorks as a going concern. Gibson says the path being taken will result in current majority owner Ironbridge bowing out, with the ownership transferring to senior lenders in the form of a new company.
At a press conference held this morning to nut out the details to MediaWorks' peers in the media industry, Gibson says staff across the company's TV, radio and web businesses will retain their jobs in their current condition.
"All the 1400 employees will keep their jobs," Gibson says, his partner Stiassny adding that this includes senior management all the way to the lower rungs of the company.
Unusually for a receivership of this scale, Gibson says unsecured creditors will receive what they're due. In fact, apart from a new board and owner, it's very much business as usual at MediaWorks. Its programming and advertising will continue running as normal.
One major change on the horizon is the massive write-off in debt expected by the company. When Ironbridge purchased MediaWorks in 2007, it ladened debt into the company. In the post-global financial crisis environment this proved to be "an unsustainable business structure", says Gibson. Currently debt stands at around $700 million, following the restructure this is expected to be closer to $100 million.
The "biggest hit" will likely be taken by the senior lenders in the company, its new owners which includes a syndicate of banks. Stiassny adds that money owed to the tax man, which MediaWorks is disputing in courts, might also be off the table.
"[The debt] is in dispute with the IRD. If it was to come home ... it will be very unlikely it will be carried across," he says.
A new board will likely be announced today. Australian businessman Rod McGeoch and former Touchdown Productions (now Eyeworks) founder Julie Christie will join the helm of the new company.