Ten receives expressions of interest and could be out of administration ‘in two months’
The administrator of stricken Network Ten has confirmed several expressions of interest have been received from firms keen to salvage the broadcaster as he declared it “very, very unlikely” it will go to the wall.
KordaMentha partner, Mark Korda, was unable to reveal how many it had received – claiming he had not studied the list – but said several potential backers had shown interest, including from overseas.
At this stage, any interest is limited to exploring the possible refinancing of Ten in some capacity and does not mean KordaMentha has received offers to buy the network.
The developments emerged after a first meeting of more than 240 creditors in Sydney – 190 relating to employee claims – which saw the formation of a 14-strong creditor committee.
Along with representatives from Illyria, Birketu and Consolidated Press Holdings – the entities owned by Ten’s guarantors Lachlan Murdoch, Bruce Gordon and James Packer – other creditors elected to the committee include three Ten employees, including veteran newsreader Hugh Riminton, Endemol Shine, Fremantle Media, Fox Studios, CBS, Commonwealth Bank, Starcom Mediavest, Metro Weather and Cricket Australia.
Outside of secured creditors, CBS and Fox are the largest creditors of Ten, Korda said.
The next creditors’ meeting is due to take place on July 19 but is likely to be delayed to give administrators more time to work through the financials.
“The idea of voluntary administration is to recapitalise as quickly as you can but July 19 is probably a bit too quick,” Korda said.
The largely procedural meeting, which will be followed by a report for creditors detailing the future options for Ten, heard that the $200m debt facility had been drawn down to $97m.
Ten’s current predicament was sparked after Murdoch and Gordon indicated to the board they would not support a new $250m loan when the current $200m arrangement ends in December. It forced Ten into a trading halt as it called in voluntary administrators.
Asked about current working capital for Ten, Korda said: “We have adequate cash resources at the present time and by the end of this week the shareholder guarantors will put a financing facility in place to ensure that Ten has sufficient cash to continue to operate.”
He said it was “his understanding” that Murdoch, Gordon and Packer are all involved in the new financing with the amount of money currently being finalised.
Earlier, Korda explained to creditors the potential options they have for Ten, including realising its assets and liquidating the company.
“In my long experience that would be very very unlikely, but it’s not my choice, it’s your choice as creditors,” he said.
It also emerged that CBA is likely to appoint receivers, understood to be PPB, to protect its interests.
Korda played down that potentially worrying development at the meeting, telling creditors it was usual practice for a major creditor to take such action. He stressed it will not impact the long term viability or recapitalisation of Ten.
Korda later told reporters he believed the company can be recapitalised and out of administration within two months, irrespective of changes to media laws which he welcomed but said were irrelevant to the timeframe of the administrative process.
“We won’t be pushing out the (July 19) meeting to wait for the media laws to change, we will be pushing it out based on who wants to recapitalise the company and get it out of administration sooner rather than later,” he said. “Our plan is not contingent on a media law change.”
He confirmed KordaMentha had received expressions of interest outside of the guarantors, including from overseas, but was unable to reveal further details.
“We’ve had quite a number of responses but I just don’t have the figure. It’s still early days,” he said.
He added no redundancies have been planned at Ten and said there has been no discernible impact on advertising revenue after lurching into voluntary administration. Advertisers want three strong players, he said.
Korda also said Ten had renegotiated draft terms with studios CBS and Fox which KordaMentha was “working through”.
“But whoever recapitalises the company, that comes with an agreement with Fox and CBS going forward,” he emphasised, adding the renegotiated terms had not been signed.
He confirmed the draft terms were a significant reduction on the previous deal.
Disclosure: Mumbrella is a creditor of Ten
