CVC plans sale of Australian ticket agency to cut debt-source

MELBOURNE, March 6 Mon Mar 5, 2012 7:06pm EST

MELBOURNE, March 6 (Reuters) - Private equity firm CVC , facing heavy potential losses on its debt-laden Australian TV network Nine, plans to sell off Australia's largest ticketing agency, a source said, to help reduce debt and keep hedge funds at bay.

UBS is advising Nine on a sale process that will start early next month for its Events division, made up of sports and entertainment ticketing agency Ticketek and the Allphones Arena at Sydney's Olympic Park, the source told Reuters on Tuesday.

"The proceeds will be used to pay down debt," said the source close to the situation, who asked not to be named because the matter is confidential.

Media reports have said the assets in the Events division could be worth up to A$600 million.

The London-based buyout firm could face a potential equity loss on paper of as much as $2.2 billion, and is fending off hedge funds that have bought up its debt and are trying to take control of Nine Entertainment.

Nine has A$2.7 billion ($2.9 billion) of senior debt due in February 2013. CVC is looking at options including refinancing, bringing in new investors, and asset sales.

CVC Capital Partners bought Nine for A$5.3 billion in cash and debt from media baron James Packer in several transactions between 2006 to 2008, at the height of the equities bull market, but the value of media assets have since slumped as advertising revenues dropped.

Hedge funds have been accumulating stakes in Nine's debt for over a year, and are hoping to force a debt-for-equity swap that would give them control of the business.

CVC has not engaged with the hedge funds, including Oaktree Capital and Apollo Global Management, which last week put forward a fresh proposal to convert their debt into equity.

The Events division had earnings before interest, tax, depreciation and amortisation of about A$60 million in fiscal 2011. The business is considered non-core to Nine Entertainment, and information will be sent out to potential suitors in the next week or so, the source said.

Groups including other private equity firms and trade companies have already approached Nine to express an interest in Ticketek, the person said.

CVC and UBS declined to comment.

Nine Entertainment, one of the biggest private-equity-owned companies in Australia, has assets including the Channel Nine free-to-air television station, ACP Magazines, which publishes the Australian Women's Weekly, and Ticketek, which competes with Live Nation Entertainment's Ticketmaster.