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CBS loans Ten A$143m to pay off creditors

CBS has handed Network Ten a multi-million dollar loan to pay off creditors – including 21st Century Fox chief Lachlan Murdoch – as the US broadcaster moves closer to buying its Australian counterpart.

Les_Moonves

CBS CEO Les Moonves

The agreements see CBS loaning Network Ten A$142.7 million (US$113 million) to refinance the commercial channel’s debts, according to Network Ten administrators KordaMentha and PPB Advisory.

This covers those owed to Murdoch, James Packer and Bruce Gordon, whose decision to retract their backing from Ten initially triggered its fall into administration.

A separate KordaMentha report outlining the administration process revealed the current output deal Fox has with Ten has to be renegotiated.

Otherwise, Fox is to receive just A$3.4 million as part of a creditor repayment plan. This is likely because it will be able to sell on programming rights to other broadcasters and platforms.

Other creditors include Fox-backed Endemol Shine Australia and FremantleMedia Australia.

Murdoch and WIN Corp. chief Gordon had planned to take over Ten themselves, and the Herald Sun today reported Gordon may seek to challenge CBS’s takeover as the deal needs creditor approval.

CBS – whose deal appears to offer existing shareholders no compensation for their shares transferring across – is, meanwhile, providing Ten with A$30 million of working capital as part of the refinancing plan.

Australian TV industry blog TV Tonight reported that following the latest developments, Murdoch, Gordon, Packer and the Commonwealth bank of Australia are no longer Ten creditors and no longer have committee and voting privileges.

However, Fox still reportedly has an unsecured debt and Gordon is an unsecured creditor as through regional affiliate WIN.

CBS closed a deal for Ten last month. In practice, the broadcaster has agreed to write off costs attached to its output deal and pay another A$205 million to buy the company.

The agreement will see CBS owning the network and using Australia as an early test bed for its international SVOD service, CBS All Access.

The news is notable as Australian television companies have rarely come under the ownership of foreign investors in the past, though Ten was part of Canada’s CanWest between 1992 and 2009.