ten won’t now need new equity: deutsche

From AFR Street Talk, holders:

Ten won’t now need new equity: Deutsche

Edited by Sarah Thompson and Anthony Macdonald

Ten Network’s $110 million Eye Corp sale should be enough to stave of an equity raising, according to Deutsche Bank.

Deutsche said if Ten received at least $90 million upfront for Eye, it would create enough covenant headroom to keep the banks at bay.

At $90 million, gross debt to EBITDA should be 3-times, below the maximum 4-times, and interest cover should be 3.7-times, above the minimum 3-times required by the banks.

The swing factor is earnings. Deutsche did its numbers based on television EBITDA of $56.4?million in 2013, which assumed a 70 per cent reduction in Ten’s combined channel revenue share compared with last year.

The broker said Ten had up to $10 million to $15 million of “EBITDA headroom” before breaching its covenants.

The calculations came after Ten confirmed it had received an offer of about $110 million for its outdoor advertising business Eye Corp.

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