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THE FUTURE of one of Australia's major commercial television networks is in serious doubt after its billionaire investors pull the pin on funding an extended $250 million loan to the broadcaster.
Shares in Ten Network Holdings (ASX: TEN) were placed in a trading halt this morning for up to 48 hours as the company confirmed it had received "correspondence" from Lachlan Murdoch and Bruce Gordon.
"That correspondence confirms that 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 23 December 2017," says Ten company secretary Stuart Thomas in a statement to the ASX.
There was no mention of another major shareholder and billionaire, James Packer, but it is understood he too has decided against funding the loan.
Gordon, owner of regional TV network WIN, is the largest shareholder in TEN with 15 per cent of shares, while Lachlan Murdoch, co-chairman of News Corp, has a 7.7 per cent stake in the company.
James Packer, Crown Resorts' (ASX: CWN) majority shareholder, owns 7.5 per cent and has reportedly had his stake on the market for some time, but has been unable to find a buyer.
The three billionaires are the guarantors on a $200 million loan which has been keeping TEN alive and the company has been asking them to increase this loan to $250 million when the initial loan with Commonwealth expires in December.
Thomas says the board of TEN requested the trading halt to allow it to investigate possible restructuring and refinancing initiatives.
The company is facing the prospect of being placed into voluntary administration if it cannot refinance the loan.
The Ten Network is Australia's third-placed commercial television network, behind Nine and Seven, and it has struggled to attract viewers to its programming and its advertising revenues have taken a hit as a result, despite some success with hit shows Masterchef (pictured) and The Bachelor.
The company recently announced a $232.2 million loss. TEN shares last traded on Friday at $0.16 and in the past year its value has plummeted 85 per cent from $1.16.
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