Nine Entertainment's future hangs in the balance, as several lenders challenge a debt-for-shares deal done two months ago.

The broadcaster was unlikely to be able to meet a major debt repayment deadline in February, so two of its major debt holders - US private equity funds Apollo and Oaktree - struck a deal with mezzanine debt holder Goldman Sachs and Nine's private equity owner CVC Capital Partners to swap the debt for shares in the company.

Court documents lodged on behalf of Nine say the deal is supported by more than half the senior beneficiaries holding more than 75 per cent of the debt by value.

However, several other senior lenders and parties engaged in swap arrangements involving Nine are opposing the deal in the Federal Court.

In court documents filed on Monday, they launched a bid to prevent a meeting of Nine's creditors which would approve the deal.

Nine's other lenders say the debt-for-equity swap, under its current terms, will initially give Oaktree and Apollo a total of five out of nine directors, thus giving them effective control of the company.

Yet Oaktree and Apollo only hold about 45 per cent of Nine's secured debt between them.

The board would have the power to issue shares and options, pay dividends and consider floating Nine on the share market.

The other lenders say this will give Oaktree and Apollo, with their board majority, rights exceeding those of other senior debt holders, known as the par lender group, as well as the swap parties.

The par lender group is made up of Portigon, GE Capital Finance and Credit Industriel et Commercial, while the swap parties are NAB, RBS, Cooperative Centrale Raiffeisen-Boerenleenbank, Rabobank, Credit Agricole and BNP Paribas.

The above creditors argue they have not agreed to become shareholders in Nine and therefore cannot be forced to swap their debt for equity.

Queue of creditors

The par lending group says, under current estimates of Nine's value by PPB Advisory of between $1.8 billion and $2.1 billion, Goldman Sachs and other unsecured creditors would receive nothing because the amount owed to senior lenders ($2.28 billion) is greater than the value of the company.

However, if the scheme of arrangement goes ahead, unsecured lenders, notably Goldman Sachs, owed around $1.1 billion stand to receive a 3.75 per cent stake in Nine and $22 million in cash.

These unsecured lenders would probably receive no return if the company was liquidated because they would be behind the senior lenders in the queue of creditors.

CVC also stands to retain a 0.75 per cent stake despite having a claim on the company's assets as the current owner that would rank even below that of the unsecured lenders.

The senior lenders, including Oaktree and Apollo, would receive an estimated 51.5-60.4 cents in the dollar in the event of a liquidation, depending on Nine's value in a sell-off.

The par lender group say this may be a better deal for them than the scheme of arrangement, under which they would receive only 25 cents in the dollar and a minority shareholding in Nine "with no ready market for their shares".

If Nine does get approval to go ahead with the scheme, it plans to float on the share market within 18 months, although a decision on whether to list and the timing of any float would ultimately be at the discretion of its board.