Yellow Pages Group lenders crystalise NZ$1.05 billion of losses

Yellow Pages Group lenders crystalise NZ$1.05 billion of losses

Yellow Pages Group has confirmed that its more than 30 lenders, led by lead banker the BNZ, have crystalised NZ$1.05 billion of losses as the directories business completes a capital restructure and confirms a new board.

Yellow Pages was sold by Telecom for NZ$2.24 billion to Hong Kong-based private equity group Unitas Capital and and Teachers’ Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, in March 2007 in a leveraged buyout that included about NZ$1.5 billion of debt. The shareholders interests are now confirmed as worthless with the lenders taking full control.

Yellow Pages says it now has a capital value of NZ$750 million as reported by interest.co.nz yesterday, which is more than offers received in last year's attempted sale of the business run by Goldman Sachs, which interest.co.nz understands ranged from NZ$400 million to NZ$600 million.

The company also confirmed that Brent Impey, the former CEO of TV3 parent MediaWorks and new RadioLive talk show host, is among five new directors joining its board.

After massive write downs of goodwill and brand value, Yellow Pages posted a NZ$1.4 billion loss for the June 2010 financial year, up from a loss of NZ$338.3 million in the June 2009 year.

Lenders in the original leveraged loan included BNZ, ANZ, Westpac, the Accident Compensation Corporation, Credit Agricole Corporate and Investment Bank (formerly Calyon), Barclays Capital, Macquarie Bank, Allied Irish Banks, Sumitomo Mitsui, United Overseas Bank, Hastings Funds Management, Export Development Canada and the Royal Bank of Scotland.

The subordinated debt holders included ABN Amro - now part of the Royal Bank of Scotland - Deutsche Bank, Barclays and Intermediate Capital Group. They tried to offload NZ$300 million of Yellow Pages' debt to the public in 2007 through a retail bond offer that was first halved to NZ$150 million and then canceled due to lack of demand as the global credit crisis kicked in.

Banks holding Yellow Pages debt post the restructure are understood to include BNZ, Deutsche Bank, Goldman Sachs and Barclays.

Read Yellow Pages' statement below:

Yellow Pages Group has successfully concluded a capital restructuring which brings certainty for stakeholders and customers.

The company now has a capital value of $750m, which gives it strong long-term sustainability on its recent annual profit (earnings before interest, tax, depreciation and amortisation) performance of $143m.

The Group’s senior lenders have taken ownership of the company through a restructuring which will see the trading businesses sold into a new corporate framework with new debt facilities.

A total of $1.05 billion of debt has been written off, allowing the new entity to operate on a sound commercial basis given its highly satisfactory trading performance.

The new structure is accompanied by the appointment of a new Board of Directors which will be led by experienced directories executive, Andrew Day as Chairman, and includes two highly regarded New Zealand directors, Brent Impey and Liz Coutts.

Also on the Board are two experienced overseas directors – Scott Pomeroy from Colorado and Paul Wilson of Sydney.

A former non-executive Director at Yellow until April 2010, Mr Day brings significant international experience and expertise in telecommunications, online media, directories, advertising and investment, all of which will be a key asset for the business in its next phase of development. He is a former Chief Executive of Telstra’s Yellow and White Pages division, Sensis, and also a former CEO of the pan-European directory company, Truvo.

Chairman Andrew Day said he was delighted that the new corporate structure could now provide certainty for staff, for customers and external stakeholders, all of whom could have confidence in the Board’s commitment to build on the promising profit performance demonstrated by Yellow in difficult trading conditions.

“We are focused on growth and increased profitability, and will be moving quickly to build on the strong operational fundamentals that the Yellow Pages Group has maintained throughout the global recession.” “The new capital structure means we can move forward with optimism and focus on enhancing the value of our brands through further investment and operational efficiencies,” Mr Day said.

(Update includes detail of banks who made the loans).

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 The sale of yellow pages by Telecom was the smartest thing that Telecom has ever done or ever likely to do.Those bankers holding the loans must be very worried,write off $1 billion and still think its worth $750 million, best offers $400 to $600 mill. Technology, the Internet  have left YPG with no where to go.

And the most stupid thing the Canadian Teacher's Fund managers have ever done! Who were they? Do they want to invest in our power generators by any chance?

Lets see if the Canadian Techers Fund want to buy some of NZ rail, NZ post maybe even some Skyhawks..

 

The Canadian Teachers Fund,they have the smartest fund managers going.Why would they invest those funds in a white elephant like yellow pages.Just makes you wonder about our so called fund managers, paid heaps even if they get it wrong, cool job...

So out of those dozens and dozens of Yellow banks there is just FOUR that remain, BNZ, Deutsche Bank, Goldman Sachs and Barclays. Now the BNZ has been termed "lead bank" but that's in name only.

The largest holder of senior debt now allegedly is Deutsche Bank followed by Goldman Sachs [who have been busy buying off the others at heavily discounted rates]. These two on the basis of their voting rights are well & truly running things. It's interesting how the name "Goldmans" keeps cropping up, they were the ones that got a reluctant to sell Telecom $2.24 Billion when the Yellow asset was worth $1 Billion, at best, even back then.

I feel sorry for the local Yellow entity. Deutsche & Goldmans are probably really going to "screw things down" & get their pound of flesh out from the locals. We will wait & watch with interest.