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CVC to inject A$335m into struggling media company

The new equity will increase CVC Asia Pacific's current 75 percent stake in PBL Media. Meanwhile the firm is going to court over an add-on acquisition to Asia Timber Products.

CVC Asia Pacific, the Asian arm of global buyout firm CVC Capital Partners has agreed to inject A$335 million ($215 milllion) into Australian media group PBL Media.

The injection is part of PBL Media’s A$445 million recapitalisation proposal to banks, which if accepted will relax debt covenants on the group, the company said in a statement.

If the proposal goes through, new shares will be issued and CVC Asia Pacific’s current 75 percent stake in PBL Media would increase to 90 percent, according to The Australian newspaper.

“The recapitalisation proposal already has the support of 31 percent and 80 percent of the senior and mezzanine lenders respectively,” according to Ian Law, chief executive of PBL Media. He added that the process will take another three to four weeks to complete.

PBL’s assets include media company ACP Magazines, television network Nine Network Australia and event ticketing company Ticketek.

Separately, Asia Timber Products, a unit of CVC Asia Pacific portfolio company Plantation Timber Products Group, is suing Shenzhen-based Asia Dekor.

Asia Dekor was purchased as an add-on acquisition in November 2007. It has been accused of breaching unnamed covenants and warrants in the sale and purchase agreement.

Until the dispute is resolved, the approximately S$25.4 million ($16.7 million) owed to Asia Dekor from its sale to CVC Asia Pacific, will continue to be held in escrow.

Asia Dekor is a manufacturer and distributor of laminate flooring. Plantation Timber Products is a manufacturer and distributor of fibre panels and laminate flooring.

CVC Asia Pacific, PBL Media and Asia Dekor could not be reached for comment.