Ten tries again to raise cash

Rose Major

Australiaís Ten Network is having another go at raising cash, after it was forced to abandon a plan back in February following a lack of interest from investors.

Ten Network Holdings is placing 120 million new shares at A$1.15 each, an 8.4% discount to the broadcasterís closing price on Monday, the day before the equity raising was announced. The A$138 million proceeds will go towards paying down debt as well as improving Tenís balance sheet flexibility.

The broadcaster has A$990 million in ongoing debt facilities, with drawn net debt forecast to be about A$600 million at August 31.

The previous attempt by Ten to raise cash was abandoned amidst uncertainty over finances at Tenís majority owner, CanWest. While CanWest is yet to recapitalise (see recent story), it is increasingly clear that the Canadian media group is likely to have to divest its stake, which will fall to 50.1% from 56.6% after the cash raising. CanWest will not participate in the placement.

Ten also reiterated previous guidance that the company would be within the requirements of its banking covenants at the end of its financial year on August 31. August banking convenants will be achieved without the inclusion of funds from the equity raising.