Billionaires might end up with Ten by Christmas

Hancock Chairman Gina Rinehart. Photo: SuppliedBillionaires Lachlan Murdoch, James Packer and Bruce Gordon might end up with complete control of the Ten Network by Christmas if Malcolm Turnbull does not slash TV licence fees in the upcoming Budget.

It is one of many pieces that must fall into place before the $200 million loan facility expires on December 23, along with the debt guarantee from the troika of billionaires.

In its half year accounts – which reported a $232 million loss for the half year – Ten stated that it needs a new debt facility before the current one with the Commonwealth bank expires in December. To get this new loan, it will need another debt guarantee from the current guarantors, or other parties.

But it said that discussions with the relevant parties has revealed they in turn require a demonstration from Ten that it can turn around the performance of its TV business – which is expected to remain in the red for the full year.

Ten’s management team, led by Paul Anderson, have identified three key areas to deliver the goods: A new business transformation program with further cost cutting, a renegotiation of some onerous programming contracts, and last of all – a reduction in TV licence fees.

Anderson was careful not to hold a gun to the government’s head on the latter point. When asked if no movement on the licence front could doom Ten he said: “I think that’s part of the puzzle. We’ve spent a lot of time with the government campaigning for that.”

The uncertainty created by these issues is why Ten’s auditors stated there is a “material uncertainty” that may cast significant doubt on the company’s ability to continue as a going concern until it clarifies these issues.

If it doesn’t manage to do this, the path is clear.

If Ten is in breach of its loans and the guarantors are forced to act, the security over Ten’s assets passes to these guarantor shareholders.

“This may lead to the shareholder guarantors having the right to enforce that security and appoint a receiver which may conduct a sale of Ten group assets in which the shareholder guarantors may participate,” the company said in the explanatory notes to the meeting in 2012 where shareholders – including Gina Rinehart – approved the guarantee.

It won’t be as easy as that, of course. A grab by Murdoch or Gordon would send all sorts of regulatory red lights flashing due to the considerable media interests that both represent. The only clean guy at the table is Packer, and all he wants to do is hit the exit button on this mess.

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