TEN TOTTERS AS DOUBTS EMERGE ON KEY BACKERS
INVESTORS in the broadcaster behind MasterChef Australia, The Project and The Bachelor are bracing for further volatility today amid speculation key backers are losing faith in the group.
Ten Network has already suffered a $328 million plunge in its market value in the past year as it battles with lacklustre ratings and a weak advertising market for the broader industry.
It is in the spotlight today following speculation at the weekend that key financiers may not agree to guarantee a new $250 million loan to keep it afloat.
Ten is widely expected to provide an update to the market this morning.
A year ago, Ten had a market capitalisation of $387 million, but that figure had been whittled to $59 million by the close of trade last week. The broadcaster declined to comment yesterday.
On one day in April, Ten shares plummeted almost 20 per cent as it was revealed the struggling broadcaster needed its key backers to guarantee the loan.
Those backers – James Packer, Lachlan Murdoch and Bruce Gordon – already guarantee a $200 million line of credit due to expire on December 23.
Each is then entitled to a $31 million guarantor fee.
In a directors’ report accompanying its results for the six months to February, the group in April confirmed its future was uncertain without a new loan.
“There is a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern,” the report said.
Ten suffered a net loss of $232.2 million for the six months to February, compared with a slender $13.4 million profit for the same period a year earlier.
The network revealed it was writing off $214.5 million off the value of its television licence, dramatically intensifying its losses for the half.
Ten shares closed on Friday at 16c.