The Ten Network has this morning placed its shares in a trading halt after influential shareholders in the embattled broadcaster could not guarantee its financing raising fears it may be forced into voluntary administration.
In a statement to the ASX this morning, Ten said, “Over the weekend, TEN received correspondence from financial advisers to Illyria Pty Limited (Illyria) and Birketu Pty Limited (Birketu), two of the shareholders which guarantee the Company’s current credit facility.”
Illyria is the private investment firm of Lachlan Murdoch and Birketu is Bruce Gordon’s. Both are significant shareholders in Ten.
It was believed that shareholders Murdoch, Gordon and James Packer would guarantee a new $250 million loan to replace the existing $200 million overdraft, which needs to be repaid to the Commonwealth Bank in December. However, that no longer appears to be the case and Ten’s future looks grim as it faces potential administration if it can’t secure a new source of funding.
The beleaguered network recently posted a $232 million loss and its CEO, Paul Anderson, has constantly warned of its doubtful future as a going concern in the increasingly tough TV advertising market.
Gordon is Ten’s largest shareholder with 15 per cent while Murdoch and Packer both own 7.7 per cent each.
However, some believe that with new media ownership laws on the horizon some players would indeed like Ten to have an administrator appointed.
The appointment of administrators could give the broadcaster a chance to get itself out of onerous contracts with US networks CBS and 20th Century Fox.
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.