Troubled Australian Broadcaster Ten to Raise New Capital
SYDNEY - In a move which some analysts have branded inconsistent, Ten Group Holdings, the parent company of beleaguered free to air broadcaster Network Ten, is planning a AUS$225 million ($226 million) capital raising, as shares in the company went into a trading halt on the Australian Stock Exchange Wednesday.
Ten requested the trading halt “pending an announcement in relation to a proposed capital raising and other initiatives,” the company said in a statement to the ASX, Wednesday morning.
The news of the capital raising paves the way for a stormy annual general meeting for Ten on Thursday. The company’s board – dubbed in some quarters "the billionaires club" with 40 percent of the stock jointly owned by chairman and News Corp director Lachlan Murdoch, casino billionaire James Packer, the world’s richest woman, Gina Rinehart and long time media investor, Bruce Gordon - will have to justify the move to investors.
Just two years ago, Ten's share price was $1.51. On Tuesday it closed at 32 cents and, while Ten has not released details of the capital raising, reports here say stock will be sold at 20 cents, a 40 percent discount to Tuesday’s closing price.
Ten finished a distant third in the 2012 TV ratings year, which officially ended Saturday, with its total people audience share falling 12.8 percent year on year. Its three channels combined drew a share of 18.9 percent against market leader Seven’s 31 percent share and the Nine network’s 27.6 percent share. The ratings decline followed a string of poorly received programs including local dance competition Everybody Dance Now, I will Survive, a competition to find the next star of Priscilla, The Musical and its nine-month-old Breakfast program.
100 employees left the company last week in a round of redundancies, mostly in its news and current affairs division.
The fall in ratings and a tough advertising market led to a drop in revenue, and the need for a capital raising as recently as June. Ten announced a loss of $12.9 million for the year, at the company’s full year results in October. Then, new CEO James Warburton said there would be no need to raise further equity.