Ann: Eye Corp sale agreement termination notice , page-3

re: Ann: Eye Corp sale agreement termination ... jhu, there may be a need for $100m new equity to avoid breeching covenants, according to CLSA analysts- and that was $100m if the Eye Corp sale went through. From AFR Street Talk:

http://www.afr.com/p/opinion/ten_in_need_of_new_equity_clsa_says_U2GARfcx24XKOFIaOjMW3M

Ten in need of $100m new equity, CLSA says

Edited by Sarah Thompson and Anthony Macdonald

CLSA analysts suggest Ten Network may need a $100 million equity injection to avoid breaching debt covenants, which comes as other major brokers take the knife to Ten’s earnings forecasts.

Ten is due to present its financial 2012 results on Thursday, but it is the 2013 forecasts that are being cut by analysts. Ten’s consensus 2013 EBITDA is $80 million per a Bloomberg survey, but that appears to be under pressure.

CLSA cut its 2013 EBITDA forecasts to $34 million, from $73.2 million on Tuesday night, while Macquarie cut Ten’s expected earnings per share to 2¢.

As foreshadowed by The Australian Financial Review, brokers and investors are considering whether Ten needs to raise equity.

CLSA, whose earnings forecasts are among the more bearish in the market, said Ten may need up to $100 million to avoid a covenant breach. It said Ten’s 2013 drawn debt would be 4.9-times EBITDA and above the covenant of 4.25-times.

Interestingly, it said a $100 million equity raising would be 50 per cent accretive to 2013 earnings per share.

The numbers incorporated Ten’s sale of Eye Corp, which appears to have fallen over according to a Ten statement on Wednesday morning.