CBS to pay Ten’s debts

But network hopes to renegotiate deal with Fox

TEN Network’s secured creditors and employees will be paid out in full under a plan by administrator KordaMentha to sell the broadcaster to US media heavyweight CBS.

But TV production houses will only get paid out if they commit to staying with the network, KordaMentha’s report to creditors says.

Among creditors set to receive less than 100c in each dollar they are owed is the Twentieth Century Fox studios, operated by 21st Century Fox. CBS hopes to work with Fox to “renegotiate” its estimated $200 million content agreement, the report says.

KordaMentha says that should these negotiations fail, Fox will receive a one-off payment of up to $3.4 million against claimed debts.

Production houses include Endemol Shine Group, a 50-50 joint venture between 21st Century Fox and US private equity house Apollo Global Management.

The eagerly awaited report was initially expected last week but delayed until yesterday.

Detailing the state of Ten, it says investigations “so far had not identified any improper conduct” in the lead-up to the appointment of administrators in June. Ten was not insolvent until June 13.

Creditors to the broadcaster will now meet in Sydney next Tuesday to vote on the proposed deed of company arrangement. If approved, the deed will hand ownership to CBS and payments to creditors subject to court approval and green light from the Foreign Investment Review Board.

According to the report, CBS agreed to forgo any return from its unsecured claim and provide a further $205 million for Ten and its creditors.

The creditors’ meeting will be followed by a Supreme Court ruling to ratify the transfer of shares from existing holders to CBS. It is at this point that any challenge is most likely to occur.

It is believed billionaire media mogul Bruce Gordon may challenge CBS’s takeover bid. Mr Gordon could launch a counter bid on his own when a creditors’ meeting is held.

He and fellow shareholder Lachlan Murdoch had already secured approval from the Australian Competition and Consumer Commission to launch a joint takeover of Ten.

Fox shares common ownership with News Corp, publisher of the Gold Cost Bulletin.

Mr Murdoch, co-chairman of News Corp, and his family are major shareholders in Fox and News Corp.