Ten shares dive after cash call

Shares in loss-making Ten Network Holdings sank 25 per cent from its pre-capital raising close price as they resumed trading this morning after Ten's second cash call in under six months.

Australia's third-ranked television network tapped its shareholders, including billionaires Lachlan Murdoch, James Packer and mining magnate Gina Rinehart, for a $230 million capital raising programme last week to pay down debt.

The shares were down 24.6 per cent to 24.5 cents after touching a low of 24 cents. Before entering a trading halt last Tuesday, the shares were trading at 32.5 cents.

However after taking into account the dilutive effect of the capital raising, the stock was 2.2 cents, or nine per cent, weaker at 24.5 cents.

Ten has been struggling to find hit shows and has lost market share to top-ranked competitor Seven Network and the Nine Network, which is now owned by its lenders.

Ten has so far raised about $167 million through the issue of new shares at 20 cents each to institutional investors as part of its capital raising venture.


The second component of Ten’s capital raising, for retail shareholders, will be conducted in January.

Lachlan Murdoch, son of News Corp Chairman Rupert, and James Packer, the son of late media billionaire Kerry Packer, bought into Ten in 2010.

Murdoch, Packer and Rinehart are estimated by local media to have lost over $350 million on their combined investment in Ten over the past two years. 

CBA Institutional Equities analysts Alice Bennett and Nathan Burley said in a recent research note the capital raising highlighted Ten’s struggles.

‘‘While this second capital raising clearly removes our concerns over Ten’s balance sheet, we see continuing operational risks with Ten’s revenue share at record lows and no signs of recovery in the TV ad market,’’ the analysts said.

Reuters, AAP