Billionaires Murdoch, Gordon Pull Support for Australia's Ten Network DebtBy
Shares halted from trading as broadcaster considers position
Credit profile heading into ‘stress’ territory: money manager
Ten Network Holdings Ltd., the broadcaster of Australia’s longest-running drama series “Neighbours,” faces tougher loan refinancing hurdles after billionaires Lachlan Murdoch and Bruce Gordon flagged they won’t continue their support for the company’s credit facilities.
Advisers for Murdoch and Gordon told Ten they don’t “intend to extend or increase their support” for the company’s loans beyond their current term, which ends Dec. 23, the network said in a stock exchange filing Tuesday.
Ten, whose shares have fallen to A$0.16 from A$23.62 a decade ago, had its shares halted from trade in Sydney as it considers the position of the company and the range of restructuring and refinancing initiatives it has underway, it said in the statement.
Ten said in April that it required a new and larger loan, possibly around A$250 million ($189 million) compared with the current A$200 million borrowing facility. The loan would help service its existing credit facility and repay other debts at a time when television advertising remains weak and costs of program investment stay high.
Ten’s credit profile is wading into “stress territory,” and it will struggle to get a traditional lender to come to its rescue, according to Raymond Lee, a Sydney-based money manager at Kapstream Capital.
“This company’s credit has been deteriorating for a very, very long time. However, in the past, Ten has always been able to find assistance in times of difficulty,” Lee said. A new loan would be a “lifeline for them to try and change their business model,” he said. “But I’m not sure how easy that will be for them. That’s been difficult to do, not just for them but for their competitors as well.”