The administrator of the Ten Network has declared he expects the ailing television station to be saved.
- Creditors met to discuss options for restructure, voted for committee including Lachlan Murdoch, WIN TV’s Bruce Gordon and James Packer
- Administrator Mark Korda says cash-flow is positive and ratings are good, so network should be able to stay afloat
- Changes to media laws would mean Mr Murdoch and Mr Green could buy the station
Ten was put into administration earlier this month after key shareholders, Lachlan Murdoch and WIN TV owner Bruce Gordon, refused to support an extended line of finance.
But after the company’s first meeting of creditors in Sydney, Ten administrator Mark Korda, from restructuring firm Korda Mentha, said he was confident Ten could be recapitalised with the support of its big investors.
Creditors voted in Sydney today for a 14-member creditors’ committee, which includes the private companies of Mr Murdoch, Mr Gordon and billionaire James Packer, Cricket Australia, 21st Century Fox, CBS and three staff representatives, including senior journalist Hugh Riminton.
Mr Korda said he was confident the Ten Network could stay afloat.
“Ten is cash-flow positive at the present time,” he told Business PM.
“Ratings are good, collected all our debts, so it’s pretty much business as usual as far as advertisers, employees and programs are [concerned].
“What we have is a bit of a balance sheet problem that needs to be fixed via a recapitalisation process.”
Mr Korda said he expected the company to be recapitalised over the next two months even without changes to media laws, which would allow Mr Murdoch and Mr Gordon to buy the television station.
They have both expressed interest in buying the TV network.
Mr Murdoch owns nearly 8 per cent of Ten through his private company Illyria. Billionaire Bruce Gordon owns a private company called Birketu, which controls 15 per cent of Ten.
Mr Packer owns a nearly 8 per cent stake in Ten. He decided to join the creditors’ committee despite not being part of previous refinancing discussions.
Mr Korda said expressions of interest in Ten had been made with the bid from Mr Murdoch and Mr Gordon “one option”.
“At the end of the day it will be the creditors’ meeting that will decide who has the best recapitalisation plan,” Mr Korda said.
KordaMentha is planning to get court approval to delay the next creditors’ meeting in July to August or September, to allow a reboot plan for Ten to be developed.
Mr Korda said there were no planned redundancies.
He refused to comment on whether Mr Gordon and Mr Murdoch had pulled the plug too early when they made the decision this month to put Ten into administration.
It is also possible Ten will be put into receivership by its secured creditor, the Commonwealth Bank.
Mr Korda said that would provide critical finance to keep the television station afloat while the sales process goes on.
Saving Ten Network ‘just a question of who and what price’
Australian Shareholders Association director Stephen Mayne said he thought the Ten Network would be saved.
But he said he did not know whether mum and dad investors would get any of their money back.
“There will be new shareholders, controlling shareholders within the next couple of months,” Mr Mayne said.
“It’s just a question of who and at what price and, whether there is any value to be salvaged for the 17,000 retail shareholders.”
Mr Mayne noted that Mr Korda said today he did not think small investors would see any return.
However, Mr Mayne said the ASA was hoping Mr Korda was wrong.
“In most probability, Ten shares will never trade again and the shareholders will lose everything,” he said.
“But unlike other administrations such as Arrium, ABC Learning, Allco, Babcock & Brown, where it was obvious from the start that shareholders had lost everything, this one we are more hopeful.
“Because at the end of the day the debt to the Commonwealth Bank is only $97 million. This is not a huge debt in the context of a free-to-air television station.”