Network Ten has revealed details of a $230 million capital raising ahead of its annual general meeting today, with chairman Lachlan Murdoch suggesting the money will primarily be used to pay down debt.
Ten said the capital raising will see the company pay down $210 million in debt, while giving the company net cash of $45 million.
The money will also be used to fund restructuring costs and will act as working capital for general purposes.
Murdoch said in a statement to the ASX: “Poor execution of our spring programming schedule, compounded by a weak advertising market, has negatively impacted our results.
“The board has taken additional steps to secure and build our business, including further reducing costs while improving our programming schedule.”
Ten has brought a number of external consultants on board to deliver cost reductions. A remuneration consultant has been hired to put together an “executive plan that will better align interests of executives and shareholders”.
The reductions will see Ten's cost base reduced by approximately $35 million.
The company has been pushing its “consistent” and “stable” programming strategy for next year, suggesting this will allow Ten to start seeing growth.
It has also been expected the company would issue a profit downgrade at its AGM this morning.
In his address to the AGM - as posted on the ASX - Ten chief executive James Warburton has pointed towards improved content agreements and improved programming as reasons for hope.
He said: “We have struck improved content agreements that reduce our costs and give us increased rights. We have introduced an improved program development process.
That process is an essential part of the creation of a more consistent and stable progam schedule for 2013.
“We have developed a focused media plan and marketing budget to support our programming in 2013. We have put in place major new initiatives to reduce costs. And, we have established new agreements for 2013 with major media agency groups.
“When I started at Ten, it was evident that we needed to renew our creative content. That became – and remains – a top priority. We need to constantly focus on refreshing and expanding our content, across all our platforms.
“At the same time, we have focused on reducing costs and creating a more sustainable business and balance sheet.
“As you know, our financial performance this year has been below expectation.”
Meanwhile, Ten also said it expects the advertising outlook for next year to remain soft.
The company's capital raising was revealed yesterday when Ten went into a trading halt.
This marks the company's second round of capital raising in six months.
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