Health Care

Ten looking for new debt lifeline

Ten looking for new debt lifeline

Murdoch and another key Ten shareholder, Bruce Gordon, through their private investment vehicles Illyria Ltd and Birketu, have told the Ten board they won't extend their guarantees to a new $188 million (AUS$250 million) credit facility, after Ten's current loan falls due on December 23, throwing the future of the broadcaster in doubt.

The trading halt is a temporary measure to buy Ten's board a couple of days to consider a response to the market.

The trading halt will remain in place for 48 hours or until an announcement is made by the company.

"That correspondence confirms that those guarantors do not intend to extend or increase their support for the company's credit facilities beyond the term of the current facility which expires on 23 December 2017", Thomas said.

Despite the financial troubles, Ten is running a suite of popular shows at the moment and its television revenue increased 2.1 per cent to $341 million in the first half of the current financial year.

Administration may help Ten renegotiate programming supply contracts, including one first struck nearly a decade ago with United States giant CBS and extended in 2010 when the local broadcaster was securing content for its new digital channel, Eleven.

Losing the support of Gordon and Murdoch is a blow as the network restructures and attempts to convince the market it's a viable business.

Gordon is Ten's largest shareholder with 15 per cent while Murdoch and Packer both own 7.7 per cent each.

The appointment of administrators could give the broadcaster a chance to get itself out of onerous contracts with United States networks CBS and 20th Century Fox.

If Ten were to enter receivership, it would allow the network to dispose of these output deals and could pave the way for its guarantors to launch takeover bids if media reforms are passed that relax ownership laws.

In late April the board warned there was material uncertainty about the group's ability to continue as going concern unless it was able to cut costs, renegotiate contracts with USA suppliers, and secure licence fee cuts.

The existing $200 million facility was issued in 2013 by Commonwealth Bank.

Channel Ten's Masterchef is rating well, but the company faces financial troubles.

Some commentators have suggested if media ownership laws did change - including the mooted abolition of license fees - then News Corp and Foxtel (which owns 14 per cent) would be keen on a bigger slice of Ten.

Ten is Australia's third-placed free-to-air network and has struggled for some time to raise enough advertising dollars to cover its costs.

The current chairman, David Gordon, is a former corporate adviser and lawyer.


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