Most creditors of the Ten Network, which went into administration in June, will get 100 cents in the dollar back when the free-to-air network is sold to the American broadcasting giant CBS.
The content providers who supply programming to the network are continuing business as usual, ensuring no disruption to the business.
The administrator KordaMentha says CBS has agreed to forgo any return from its unsecured claim and will provide a further $205 million in financial support for Ten and its creditors.
The Ten Network’s secured debt of $143 million was refinanced in full on September 1 by CBS, which also provided a $30 million facility to support operations.
Talks are continuing with News Corp’s Twentieth Century Fox, a key content supplier, to renegotiate its content agreement. The long-term content agreement with Fox expires in June 2019.
However, if agreement cannot be reached, KordaMentha says Fox will get a one-off payment of up to $3.4 million against claimed debts.
KordaMentha says the amount Fox might be owed is $195 million. Other potential claims by other programing creditors are estimated to be as much as $65 million.
Here are the content providers to Ten:
- Endemol Shine Australia (MasterChef, Survivor, Offspring)
- Warner Bros Group (Bachelor, Bachelorette)
- CBS (NCIS, Bull, Scorpion, Dr Phil, library content)
- Fox (Modern Family, The Simpsons, Futurama, library content)
- WTFN Entertainment Pty Limited (The Living Room)
Ten Network creditors will meet in Sydney next week to vote on a proposed deed of arrangement that provides for CBS ownership and payments to creditors subject to court approval and from the Foreign Investment Review Board.
KordaMentha Restructuring says in a report to creditors released today that the proposed deed of arrangement enables the business to continue and maximises the return to creditors.
Billionaires Lachlan Murdoch and Bruce Gordon, both significant shareholders in Ten, had been expected to end up as full owners.
The network went into voluntary administration in June after the two shareholders refused to increase or extend a $200 million credit facility past December.
Ten in April posted a loss of $232.19 million for the half year in a tough advertising market. At that time, the company said the current debt facility was drawn down by about $66.2 million.
Earlier in the year analysts described the network as “un-investible” for most investors because of operating losses and funding concerns.