Ten's (ten.ASX:Quote,News) profit result comes days ahead of a crucial April 7 debt deadline for Ten's 56.6 per cent owner, debt-laden Canadian group CanWest Global Communications, The Australian reported.
Ten revealed in February its operating earnings for the six months to February 28 would be about $118 million, 28 per cent down on the result it achieved for the same period last year. Revenue for the company's core TV business was also forecast to be down 12 per cent for the period.
The falls in profit and revenue -- at a time of collapsing ad markets -- has turned attention to Ten's debt levels. While the company has been cutting costs, its $620 million in debt is nor far below Ten's $720 million market value.
Goldman Sachs JB Were media analyst Christian Guerra said the company remained cautious about Ten, given "high operating leverage", concerns over its "capital position and debt serviceability", and "the overhang of a possible CanWest sell-down".
RBS Equities media analyst Fraser McLeish said yesterday: "We would be looking for some direction or movement about the company's capital structure."
There is also market conjecture Ten may release details of debt covenants at today's briefing, following similar disclosures by other media companies.
Ten executives are also likely to face a grilling today about the debt position of CanWest, which faces critical creditor deadlines over the next fortnight. The Canadian group has a deadline for the coming Monday (North American time) for renegotiating borrowing conditions related to a $C112 million ($135 million) senior secured credit facility, after gaining a reprieve last month.
CanWest has also been in talks with senior lenders and noteholders to extend its access to the credit facility beyond April 7, potentially allowing it "to pursue a recapitalisation transaction".
Read more in The Australian.
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