Ten has gone went into a trading halt after two billionaire shareholders backed out of guaranteeing more loans for the free to air network.
The company told the ASX that Illyria Pty Limited and Birketu Pty Limited, two shareholders which guarantee the company’s current credit facility, say they don’t plan to extend or increase support.
Illryia is the investment vehicle of media executive Lachlan Murdoch and Birketu is associated with TV pioneer Bruce Gordon. Murdoch owns 7.7% of the network and Gordon 15%.
“Those guarantors do not intend to extend or increase their support for the company’s credit facilities beyond the term of the current facility,” Ten said today.
The current credit facility of $200 million with the Commonwealth Bank expires on December 23 and company wants to replace this with a new $250 million loan.
“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,” the company told the ASX.
“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 company 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.
Analysts have been questioning the future of the TV business.
In April, Macquarie wealth management, in a note to clients, said: “Given the difficult operating backdrop and further operating losses it is difficult to make an investment case for TEN, even at these price levels.”
And Credit Suisse said: “We see Ten as un-investible for most investors due to operating losses and funding concerns.”