Oct 31, 2012

Don’t bet on Nine staying debt free

Nine's apparent debt free status looks like being a temporary situation. There are no free lunches with hedge funds, just as there are no free lunches with private equity.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

John Cleese once made the phrase “don’t mention the war” memorable in a Fawlty Towers episode involving German tourists. From then on it has become synonymous with avoiding an unpleasant subject, as CVC Capital Partners did this week when it revealed that its long-time chairman Michael Smith was retiring.

There was nary a mention from Smith or CVC Capital of its Nine investment, which has turned out to be one of the biggest disasters private equity has had globally in its existence. The loss will be close to $US2.7 billion for its funds.

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One thought on “Don’t bet on Nine staying debt free

  1. green-orange

    The debt hasn’t “disappeared”, its simply been transferred to the balance sheet of the hedge funds. And they’ll want their money back.

    They’ll put their accountants into the company and go through all the accounts to squeeze the maximum amount of “rent” out of Nine. The fun is only just beginning.

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