Australian commercial broadcaster Network Ten is facing receivership after major backers Lachlan Murdoch and Bruce Gordon pulled their backing.
Ten has ceased trading shares after a letter to the Australian Securities Exchange (ASX) revealed Murdoch’s Illyria and Gordon’s Birketu would stop financing the network on December.
Ten has a number of expensive output contracts in place with the likes of CBS Studios International, with which it operates the Eleven network, and Twentieth Century Fox Television.
Ten’s other major shareholder, James Packer, has reportedly stayed away from extension talks and wants to sell his 7.7.% shareholding, meaning Ten must find another way to refinance the A$200 million (US$151 million) loan.
“Over the weekend, Ten received correspondence from financial advisers to Illyria Pty Limited and Birketu Pty Limited, two of the shareholders which guarantee the company’s current credit facility,” Ten wrote in its note.
“That correspondence confirms that the those guarantors do not intend to extend or increase their support for the company’s credit facilities beyond the term of the current facility, which expires on December 23, 2017.”
Ten’s board is now “considering the position of the company” in light of the news and current restructuring and refinancing initiatives that are “already underway”.
Reports from Australia claim a decision over the future of the network could come as soon as today. The trading halt is scheduled for 48 hours from its commencement yesterday, or “until an earlier announcement has been made”.
Murdoch, who is co-executive chairman of 21st Century Fox, owns a 7.7% stake in Ten, while Gordon, a former Paramount Pictures exec, has a 15% stake to go with ownership of regional broadcaster WIN.
This comes after Ten posted an A$232 million loss in April.
Australian commercial broadcasters have since been boosted after the government scrapped the licence fees theypay, this has not been enough for Ten.
Spotlight will now turn to 13.9% shareholder Foxtel, which is part owned by Rupert Murdoch’s News Corp. Should it wish to acquire Ten’s assets, it would need to see Australian media competition laws changed.
Ten’s share were down to A$0.16 a share when trading halted, which is down 85% from a year ago.