MediaWorks owners appoint Goldman Sachs to help refinance it

MediaWorks reported a nearly $10 million loss in its 2022 financial year. Photo / Michael Craig

The owners of MediaWorks have appointed Goldman Sachs to help with refinancing the business after it revealed a nearly $10 million loss in its 2022 financial year.

The Australian’s DataRoom column reported today that private equity funds Oaktree Capital Management and Quadrant Private Equity had called in the investment bank.

It reported that options could include a possible separation of its out-of-home advertising business QMS from its radio operation, with the potential aim of selling off the advertising arm.

A MediaWorks spokeswoman confirmed it had been working with Goldman Sachs in connection with its ongoing refinancing discussions but said a sale was not on the cards.

“The board is not considering an imminent sale of MediaWorks in whole or part. MediaWorks is entirely focused on delivering outstanding results for its customers, audiences and employees.”

MediaWorks operates a suite of popular music radio stations, including The Breeze, More FM, The Edge, The Rock and Mai.

Its advertising business includes 5500 outdoor touch points. The Australian reported that potential buyers of the advertising business could include New Zealand Herald owner NZME and digital billboard company Lumo.

Michael Boggs, NZME CEO, said it was always open to looking at new opportunities to deliver increased value for its shareholders.

“We don’t comment on rumour or speculation but as you’ll know, as a listed company we’re required to notify the market of anything material as we comply with our continuous disclosure requirements.”

Last month, MediaWorks reported financial results which showed it had total revenue of $214.9m – a 5.9 per cent increase on the previous year – and Ebitda of $34.4m.

However, operating costs were up 9.1 per cent in 2022, “largely due to the impact of 7.2 per cent inflation in New Zealand, as well as increased investment in our people and technology”.

The net loss after tax and other items for the year was $9.7m.

It also made a one-off impairment of $110.1m, which reflected the write-down of goodwill and “alignment of asset value to current global trends”.

Despite the impairment and financial challenges, MediaWorks chief executive Wendy Palmer told Media Insider last month there were no plans to sell any assets or split the company.

“We think we are stronger together in terms of the current structure,” Palmer said.

“The breadth of our portfolio is really great – it’s great for our clients and great for our teams internally. There’s nothing on the radar in terms of any change.”