Ten’s bleak picture
TEN Network has given itself until tomorrow morning to find new financiers or go into administration.
The broadcaster behind programs such as MasterChef Australia, The Bachelor and The Project asked for a halt to trading in its shares yesterday as it revealed two key backers had decided against keeping it afloat beyond December.
Company secretary Stuart Thomas told shareholders that investment companies Illyria and Birketu did not plan to extend their guarantee for loans to the broadcaster.
Ten has a $200 million debt facility from the Commonwealth Bank that is backed by its key shareholders and due to expire on December 23.
The network had been seeking a new $250 million loan to replace that debt facility but Illyria and Birketu, the respective investment vehicles of Lachlan Murdoch and Bruce Gordon, have declined to renew their guarantees.
It means the broadcaster could be unable to continue as a going concern beyond that date, jeopardising its broadcasting licence and casting a pall over its stable of popular programs.
“Ten’s board is considering the position of the company in light of the position being taken by Illyria and Birketu and the range of restructuring and refinancing initiatives it has under way,” Mr Thomas told shareholders.
“Ten expects that an announcement outlining the board’s determination will end the trading halt.”
The network was hoping for the support of its trio of key backers, Mr Murdoch, Mr Gordon and James Packer. While Ten’s statement yesterday made no mention of Mr Packer, he was already believed to have decided against backing a new loan.
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.
A year ago, Ten had a market capitalisation of $387 million, but that figure had been cut to $59 million by the close of trade last week.
Mr Gordon owns regional television heavyweight Win and is the biggest shareholder in Ten with 15 per cent.
Mr Murdoch is co-chairman of Bulletin publisher News Corp and owns 7.7 per cent of the broadcaster.
Ten chairman David Gordon oversees a board that also includes Foxtel chief Peter Tonagh, former federal Liberal MP Andrew Robb and Win chief Andrew Lancaster.
The group says it needs the new finance to meet its obligations under the existing debt facility, including interest payments and shareholder guarantor fees.