Ten plots $195m cash injection

The parent of third-placed Australian channel Network Ten has unveiled a plan to raise A$200m (US$195.1m) for new programming and to strengthen its balance sheet.

Lachlan Murdoch

The advertising market in Australia has been soft for some time, which has caused an uncertain period for Ten parent Ten Networks Holding. It has been seeking to restructure its financing and now aims to raise cash by offering new low-priced shares.

Existing shareholders will be offered three new shares for every eight they own at a knockdown price of 51 cents a share, according to a filing made to the Australian Stock Exchange. Ten’s share price currently stands at 64 cents, with trading halted until June 12.

Ten hopes the move will allow the broadcaster to invest in new programming and strengthen its balance sheet ahead of the maturation of a US$125m loan facility in March 2013.

“Given the uncertain revenue environment and our strategy of investing in programming renewal, the board felt it was important to strengthen our balance sheet at this time,” said Ten chairman Lachlan Murdoch.

Ten’s major shareholders – which include Murdoch, billionaire Gina Rinehart and media magnate James Packer and account for 43% of the equity – have already committed to take their full entitlements of the new shares.

Ten is also close to shedding its outdoor advertising arm, Eye Corp, as previously reported by C21, with an unnamed prospective buyer in the advanced stages of due diligence. However, Murdoch said it would sell only at an acceptable price.

The firm today announced its revenue for the three months to the end of March was down 12% year-on-year, and it warned the situation would likely continue for the time being as rivals Network Nine and Foxtel have the broadcast rights to the London Olympics this summer.

In related news, Ten has hired Lisa Fitzpatrick as director of development and production. She left her role as Network Seven’s head of programme development in December and will join Ten on June 12.

“Lisa’s appointment and the new creative development unit are key planks in our strategy to renew our creative content and to ensure we are meeting and exceeding viewers’ expectations,” said Ten CEO James Warburton.