Billionaires Graveyard!, page-93

• STREET TALK
  
• May 19 2017 at 12:10 AM
  

CBA keeps PPB Advisory on notice for Ten Network

With Ten Network's billionaire shareholders in the spotlight, it's easy to forget who the television network has to repay at the end of the year.

Commonwealth Bank of Australia has a $200 million loan on the hook, of which $66.2 million had been drawn down as at April 26.

While the loan is guaranteed by Ten's big three shareholders - Lachlan Murdoch, James Packer and Bruce Gordon - Commonwealth Bank isn't laying idle.

Street Talk understands CBA has PPB Advisory on the hook as investigating accountant, with the insolvency and restructuring specialist likely to be asked to provide a "fairness opinion" when [and if] a debt-for-equity swap gets under way.


Appointing an investigating accountant is the first step lenders often take when they are worried about a company's solvency, and whether its loan is likely to be repaid.


It's also a commonly used tactic to apply heat on the borrowing company's board, and serve as a reminder about where the bank sits in the case of administration or receivership. And it ensures swift movement down the track should the company face a restructure.

Ten laid it all on the line at the company's half-year results in April. The television company's directors devoted more than 800 words to addressing Ten's ability to continue as a going concern in the half-year accounts, leaving shareholders in no two minds about the company's plight. It needs to convince the guaranteeing shareholders that future earnings are on the up.

PPB's involvement is the final piece of the adviser puzzle.

As revealed by Street Talk, distressed situations banker Jim McKnight, who was formerly head of restructuring and debt advisory at UBS and now runs Fort Street Advisers' sector team, is working away for the billionaire guarantors Lachlan Murdoch, Bruce Gordon and James Packer.


Ten has engaged both McKinsey and KordaMentha to help it deal with the increasing pressures it is facing, while Citi and law firm Gilbert + Tobin are also tending to the troubled network.

UBS is understood to be working for Packer, who had shopped around his 7.7 per cent stake in Ten, with few interested buyers.

Gordon owns 15 per cent and Murdoch owns 7.7 per cent (News Corp, of which Murdoch is co-chair, via Foxtel has another 13.9 per cent).



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