Australian Community Media repays $20m of Alex Waislitz loan

Australian Community Media has paid back $20m of the $70m it borrowed from part-owner Alex Waislitz.

Billionaire and ACM part-owner Alex Waislitz. Picture: Aaron Francis

Australian Community Media has paid back $20m of the $70m it borrowed from part-owner Alex Waislitz to fund the $115m purchase of the rural publisher last year, despite operating in tough trading conditions and receiving money from the federal government’s JobKeeper program.

Mr Waislitz owns ACM, the publisher of regional newspapers including The Canberra Times and Newcastle Herald, with his friend and media entrepreneur Antony Catalano.

The billionaire investor has more than $1bn in assets in his private Thorney investment group, including significant shareholdings in listed companies, property and a financing and lending arm that lent the $70m in a mezzanine funding deal.

Documents lodged with the corporate regulator confirmed the lending arrangement, understood to be in lieu of borrowing money at commercial rates from mainstream banks and having Mr Waislitz sign a guarantee for any loans.

ACM executive chairman Antony Catalano. Picture: Stuart McEvoy

Instead, he lent the funds to the private company that now controls ACM as part of a mezzanine financing package that would likely see him paid interest on the loan at a higher level than market rates.

It is understood that at least $20m has been repaid already.

Sources said the quick repayment schedule showed the underlying strength of the ACM business, which was being “right-sized” by management under a strategy that has included the sale of property assets, shutting some printing centres and a great focus on generating digital advertising and subscription revenue”.

But Mr Waislitz’s listed investment company Thorney Opportunities Group (TOP) last week wrote down the 25 per cent stake it has in ACM by 15 per cent.

“With bushfires, floods and the COVID-19 pandemic creating an uncertain outlook on advertising revenues, the TOP Board has taken a prudent approach to valuing its holding in Australian Community Media,” Mr Waislitz wrote to investors.

“As with all TOP’s investee companies, we are working closely with ACM management to best position this private company for the future.”

However, it is understood that writedown only applies to the portion of the ACM business owned by TOP and that the value of the remainder, including stakes owned by both Mr Catalano and Mr Waislitz, remains unchanged.

Mr Waislitz has also taken guarantees over several ACM properties in return for his loan, including printing operations in Richmond, NSW, Ballarat and The Canberra Times building in Canberra.

He and Mr Catalano individually put in $15m each in cash to purchase ACM from Nine Entertainment in a $115m deal finalised on June 30 last year. The pair were not available for comment.

Meanwhile, a potential competitor could be emerging in the form of an operation being put together by a team of former senior media executives and technology investors.

The group, using the working title of Local Journalism Initiative, is collaborating on a national initiative to create a network of independent news publishers in regional and rural Australia.

The project, which is being led by Alan Oakley, Tony Gillies and Michael Waite, expects to make an announcement on funding and potential masthead launches by late September.

Mr Oakley is a former editor of The Sydney Morning Herald and the Herald Sun, while Mr Gillies was editor-in-chief of AAP for 16 years and worked at Rural Press before its merger with the then Fairfax Media. Mr Waite launched the Naracoorte News in his home town in South Australia earlier this year after 20 years working in financial roles in the US, including a stint at Bill Gates’ private investment company.

The trio is targeting “media deserts” — regions no longer served by print or digital newspapers.