Australian TV network Ten has entered a trading-halt amid fresh concerns about the company’s financial viability being raised.
News broke over the weekend that two of the company’s key investors would not guarantee the company’s $250 million debt, due for renewal in December of this year, leaving the company in a precarious position.
It now needs to secure alternative funding before then, or face administration.
The company told the ASX that “Over the weekend, Ten received correspondence from financial advisers to Illyria Pty Limited and Birketu Pty Limited. ”
Illyria (owned by millionaire Lachlan Murdoch) and Birketu (owned by TV executive Bruce Gordon) hold 7.7% and 15% shares in the company, respectively.
The free-to-air network says “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.”
As a result, “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 underway. Pending these determinations over the coming days, Ten considers that its shares will not be able to trade on an informed basis and, accordingly, requests the trading halt.”
The halt comes at a dire time for the company, which recently posted a loss of $232.19 million for the recent half year period and was savaged by Credit Suise in a note that rated the company “un-investable.”
At that time, the company’s board of directors warned there was uncertainty about their ability to continue unless it was able to cut costs, renegotiate contracts with US suppliers, and secure licence fee cuts.
Like many of the previously-dominant giants of Australian television, Ten has been slow to adapt to the rapid changes in the way that Australian audiences consume content. Now it looks like that may cost them.
