Ten calls halt to share trading

The parent company of Australia’s beleaguered Network Ten has asked for trading in its shares to be suspended after confirming two billionaire shareholders had decided not to support new loans.

Paul Anderson

The board of Ten Network Holdings advised the stock exchange it is considering the position of the company, whose credit line expires on December 23.

Billionaire shareholders Lachlan Murdoch, James Packer and Bruce Gordon are the guarantors of a A$200m (US$151.1m) cash-advance facility from the Commonwealth Bank.

Revealing in April a loss of A$232.2m for the six months to Feb 28, Ten said it was looking to arrange a new or amended borrowing facility of A$250m.

At that time, it warned the market there was “material uncertainty” about its future as it signalled moves to renegotiate content deals with 21st Century Fox (shared with pay TV platform Foxtel, which owns just under 15% of Ten) and CBS Studios, which reportedly cost more than A$100m annually.

Today the company confirmed Lachlan Murdoch, whose private investment firm has a 7.5% stake, and Bruce Gordon’s Birketu, the largest shareholder with 15%, will not extend or increase their support for the credit facilities beyond December 23.

Ten’s shares last traded at A$0.16, valuing the company at A$59.1 million. The company asked for a trading halt of 48 hours unless there is an earlier announcement while it evaluates a range of restructuring and refinancing initiatives. It faces potential administration if it can’t secure a new source of funding.

CEO Paul Anderson told staff today: “Whilst this is an unsettling time for us all, we must assume that our operations continue as usual.”

James Packer was keen to sell his 7.7% stake but has been unable to find a buyer and was not part of the refinancing discussions.

Murdoch, Gordon, who owns the WIN network, and Foxtel are not allowed to increase their stakes under cross-media rules that the government is attempting to reform. However, the legislation does not yet have the support of the senate, where the government relies on the votes of the minor parties and independents.