The Federal Court has ruled that a meeting of Nine's creditors can go ahead, paving the way for a deal to save the company from receivership to be accepted.
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They argued that the deal unfairly favoured the two biggest secured creditors, US hedge funds Oaktree and Apollo, by giving them effective control of Nine.
between the two hedge funds, Nine's owner (CVC Capital Partners) and Goldman Sachs (an unsecured lender to Nine), creditors would swap their debt for equity and a 25 cents in the dollar cash payment.
The deal also gave Apollo and Oaktree five out of nine seats on the company's new board, giving them effective control over Nine's future direction and decisions such as if and when to float the company on the share market.
Under the arrangement, unsecured creditors, such as Goldman Sachs, will receive 3.75 per cent of the company's shares and a $22 million cash payment, despite the likelihood that they would have received no return if the company went into liquidation.
However, despite the opposition of some creditors, Justice Jacobson has ruled that the creditors' meeting can go ahead on January 21.
It appears that the proposed scheme of arrangement has the support of at least half the company's senior creditors holding more than 75 per cent of the debt by value, as well as similar support from unsecured creditors, making it likely to be accepted at the meeting.
There will be another court hearing after the meeting, on January 29, to hear any application to approve the scheme.