PBL Media, the holding company behind Australian television network Channel 9 and ACP Magazines is in serious trouble, and may face breakup if a major restructure of financing can’t be completed.
In an assessment of the 2007-08 financial report of PBL Media, auditors Ernst & Young noted an “uncertainty” over whether the company could service its debt, and suggest that “in the absence of a restructure of the debt arrangements, a recapitalization, major asset sales or a combination of the above, the consolidated entity is not likely to meet all of its financial covenants for the next 12 months”.
PBL Media is more famously remembered in Australia as the Packer Media Empire. Founded originally by Sir Frank Packer, and responsible for the first television station in the country, the company grew under the leadership of Kerry Packer, who passed on in 2005. Son James Packer, Scientologist and friend of Tom Cruise took over upon his fathers death, and split the original Publishing and Broadcasting Limited into two entities, PBL Media and Crown Ltd for the casino assets. James subsequently sold half of PBL Media to CVC Asia Pacific for $4.5 billion AUD, then later a further 25% for $526 million. Packer and right hand man John Alexander left the PBL Media board in October.
According to the Sydney Morning Herald, James Packer has declined to provide more cash for the company, leaving the financial obligations to CVC Asia Pacific to solve.
If PBL Media breaches its debt obligations and CVC does not inject more money, the 60-plus lenders – led by struggling banks such as UBS – could ask for early repayment. PBL Media “does not expect that it could repay the amounts from current operating cash flows”, the auditors warned.