Most Ten creditors to be 'paid in full' Employees, secured and...

Most Ten creditors to be 'paid in full'

Employees, secured and trade creditors will all be paid what they are owed in full under the proposed CBS takeover of Network Ten.
Peter Trute
Australian Associated PressSEPTEMBER 4, 20176:53PM
Most groups owed money by the struggling Ten Network, including employees, will be paid in full under the takeover deal proposed by US broadcast giant CBS, the administrators of the third-ranking free-to-air player say.
A report to creditors of Ten released on Monday night says the deal proposed by US broadcast giant CBS, in its surprise bid for the Australian network, will enable Ten to continue and "maximise" return to creditors.
Secured and trade creditors, content providers who continue with the network and employees will all receive 100 cents in the dollar, the report says.
The administrators have urged creditors to support the CBS Deed of Company Arrangement (DOCA) proposal when they meet in Sydney on September 12 to vote on a course of action.
The administrators have argued in their report that putting Ten into liquidation or seeking to sell the business as a going concern would return less to creditors than proceeding with the CBS DOCA.
Under the CBS proposal, onerous and terminated contracts will be paid at 10 cents in the dollar while programming contracts with Twentieth Century Fox worth $195 million will either be renegotiated or paid out at up to $3.4m, a statement from adminstrators Korda Mentha said.
CBS has made a $143 million loan to the Ten Network to refinance the struggling local outfit's debt - advancing its interest even as a potential challenge to its takeover still stands.
CBS completed a $142.7 million refinancing deal of the free-to-air broadcaster's debt on September 1, including covering $32.6 million owed to Lachlan Murdoch, James Packer and Bruce Gordon for their role in previously guaranteeing a $200 million finance package Ten had with Commonwealth Bank.
It was the withdrawal of debt guarantees - first by Mr Packer and subsequently by his fellow guarantors - that sparked Ten's descent into insolvency in June.
CBS has a claim of $348 million on Ten for existing content supply contracts.
The US network, which needs creditor approval for the takeover bid it launched in August, has also provided $30 million in working capital to Ten.
While CBS is progressing its takeover claim, it is possible billionaire Ten shareholder Bruce Gordon may still challenge the bid.
It is understood Mr Gordon, who with fellow shareholder Mr Murdoch had already secured regulatory clearance to launch a joint takeover of Ten, could take on the CBS bid on his own when creditors meet to vote on the US giant's move.
Under the proposed CBS bid shareholders will receive no compensation for their shares being taken over.
CBS will have to clear the Foreign Investment Review Board and face a court ruling to certify the transfer of shares from existing holders to CBS.
The administrators say in their report they expect a court will support the transfer of shares to CBS if it is approved by creditors, given Ten's financial position.