Ten shares tank after warning on network’s future

Shares in the Ten Network group lost nearly 20% of their value yesterday when the network warned its future was under threat unless it could reduce program supply costs, negotiate a new $250 million loan facility and get a broadcast licence fee reduction from the federal government.

The market savaged the network after fears were expressed in its half-year results, with the share price dropping from an open 44.5 cents to close at 35 cents, cutting the market capitalisation of the network to just $130m.

Announcing a $232m loss the network said it was hit hard by a $214m impairment charge – the cost of its broadcast licence fee – and was now speaking with the Commonwealth Bank about the future of a $200m loan which falls due in December, its guarantors and its program suppliers about renegotiating deals.

CEO Paul Anderson tried to downplay the seriousness of the warning on the network’s future – contained in an appendix to the half-yearly results.

In the appendix of the results the network warned: “… there is a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern,  and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business”.

Ten CEO Paul Anderson says industry is “under severe duress”.

However the warning sent a shockwave through the market, with sellers wiping nearly 20% off the share price and reducing the market capitalisation of the company, which was over $200m just weeks ago, to just $130m.

Asked if the company could survive, Anderson said he believed the network was on the right track with its transformation process.

“The appendix 4D sets out in quite a lot of detail our financial statements and the various disclosures that go around that, so what we have done today is not only set out the financial statements  and the set of disclosures, we have also set out in our release and also contained in the 4D the plans that we have in the company both to refinance it and how we are planning to do that in terms of transforming the business, improving revenue and reducing costs,” Anderson said.

“What we have said to everyone today is that we have a plan around refinancing the business and we have a plan in order to transform the business.

“What we do acknowledge is that the business has to change.”


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.