Australia’s Network Ten Seeks $189 Million From Shareholders

Lachlan Murdoch - H 2008
Getty Images

Chairman Lachlan Murdoch said the capital raising is necessary to continue the network’s turnaround.

SYDNEY - Ten Network Holdings shares were placed in a trading halt on the Australian Stock Exchange Wednesday as the company detailed plans to raise AUS$200 million ($189 million) from shareholders and warned that its share of the $3.8 billion Australian ad market is unlikely to improve in the near term.

Chairman Lachlan Murdoch, who owns a 9 percent stake in the company, said today the capital raising was necessary to continue the networks’ turnaround.

“Given the uncertain revenue environment and our strategy of investing in programming renewal the board felt it was important to strengthen our balance sheet at this time,” Murdoch said.

He said the money being raised would be used to invest in programming for growth,  and provide refinancing flexibility  ahead of the upcoming maturity of a $125 million debt facility due next March.

Ten will offer its shareholders three new shares for every eight held, at a price of 48 cents each.

Ten's shares last traded at 61 cents.

Murdoch and fellow directors and shareholders James Packer, mining magnate Gina Rinehart and Bruce Gordon, representing 43 percent of Ten’s share register,  would all take up their entitlements under the share offer.

Chief executive James Warburton said television revenue for the third quarter was down by 12 percent compared to the prior corresponding period as was TV revenue for the nine months to May, in an update to the market. Ad markets he said “continue to be soft with very little near term visibility on revenue for July and August.”

The third-ranked network targets the 18-49 demo with its primary channel and males and the 13-Plus with its two digital channels, and has had a lackluster year with year to date ratings shares falling 2.5 percent to 25.1 percent overall, according to analysts.

Ten’s flagship show, Masterchef, while still drawing an average of 1 million viewers a night, has slipped in the head-to-head ratings race behind Nine’s reality block busters, The Block and The Voice in their current runs.