CVC will inject $335 million of new equity into PBL Media and cancel $110 million of excess undrawn facilities.
James Packer's Consolidated Media Holdings (cmj.ASX:Quote,News) will not participate in the fresh equity injection so its holding will be diluted to less than 1 per cent.
The recapitalisation will lower PBL's debt to $3.8 billion from $4.25 billion.
PBL chief executive Ian Law said the recapitalisation and changes to existing debt covenants would give the company headroom to safely trade through the bottom of the current economic cycle.
"The next 12 to 24 months are clearly going to be testing for all businesses,'' Mr Law said.
"The great thing about the revised financial structure is we are now in a position to withstand a severe recession, should that eventuate, and we will not have an issue with our financing.
"We think our business is well placed and current trading is holding up well.''
Mr Law said the forecast net debt of $3.8 billion - $3.05 million in senior debt and $765 million mezzanine debt - after the recapitalisation was long term in nature, with no refinancing on any of it until early 2013.
CVC Asia Pacific managing partner Adrian MacKenzie said CVC were "firm believers'' in the PBL business and its management team.
"We take a longer term view of our investments, and it is in this context we sought to change the capital structure, invest more equity and support PBL Media,'' he said.
CVC initially invested $1 billion for a 50 per cent stake in PBL Media when it was formed in late 2006.
James Packer's then Publishing and Broadcasting Ltd, which has since been demerged into a separate gaming company (Crown Ltd) and a media company (Consolidated Media Holdings Ltd), had the other 50 per cent.
CVC acquired a further 25 per cent stake in PBL Media from CMH for $526 million in 2007.
In October 2008, CMH said it would no longer contribute further equity to PBL Media.
PBL Media's assets include Channel Nine - the network that laid the foundations for the fortune of Mr Packer's late father, Kerry Packer.
CVC said that because CMH was not participating in the fresh equity injection, CMH's stake in PBL would be diluted to less than 1 per cent.
CMH said on Tuesday that its shareholding in PBL Media would dilute from 25 per cent to 0.074 per cent.
Oz Minerals’ debt reaches $1bn
Lehman’s bond insurers to take a financial bath
HCA to conserve cash, pay debt with bonds
