The hedge funds, Oaktree Capital and Apollo Global Management (APO.N), put their restructuring proposal -- which would see hedge funds take control of Nine -- to CVC on Friday in a letter and again requested a meeting with the buyout firm, the person with knowledge of the situation said.

The person was speaking on condition of anonymity because the matter is confidential.

CVC Capital Partners bought Nine for A$5.3 billion in cash and debt from media baron James Packer from 2006 to 2008, as credit markets were booming. The network's advertising revenues have since fallen as the Australian economy weakened.

CVC shelved plans before Christmas to refinance the debt, as banks sold out of the debt and hedge raised their stakes. CVC has repeatedly said it is in no rush to refinance its senior debt in advance of maturity in February 2013.

The options for CVC include tipping in more equity, which is seen as unlikely on top of the reported A$1.9 billion already invested in Nine, refinancing the debt, or selling some non-core assets to pay off debt, banking sources have said.

A spokeswoman for CVC declined to comment.

Sources have previously said that Oaktree and Apollo hold A$1 billion or about 37 percent of the A$2.7 billion ($2.9 billion) senior debt owed by Nine, part of a group of hedge funds including Och-Ziff (OZM.N).

However, Oaktree and Apollo's share of the total debt is actually 28 percent, a second source familiar with the situation said on Monday.

Nine Entertainment Co, one of the biggest private-equity owned companies in Australia, has assets including the Channel Nine free-to-air television station, ACP Magazines which publishes the Australian Women's Weekly, ticketing agency Ticketek and Acer Arena.

(Reporting by Victoria Thieberger; Editing by Richard Pullin)

• A Permanent Economic Emergency