Australis Board In Urgent Meeting
Sydney Morning Herald
Sunday April 14, 1996
Australis Media's directors meet for an emergency board meeting today as the pay TV group enters its third week of suspension amid widely differing claims about the progress of vital refinancing talks with Mr Rupert Murdoch's News Corp and US cable giant Tele-Communications Inc.
Australis chairman Mr Rodney Price was said to be flying back to Sydney last night for the last-ditch meeting. Suggestions the $US150 million ($190 million) News/TCI lifeline was finalised and would be announced this week were met by claims negotiations had completely broken down because the microwave and satellite broadcaster's business plan didn't add up.
One source said an investment bank review of Australis had found it would need much more than $190 million pumped into it before it broke even.
This had prompted News and TCI to pull out of negotiations and focus on buying Australis assets as the only "safe" way to pump cash into the company.
Australis is receiving $US5 million a week from its largest shareholder, TCI offshoot Lenfest Communications. Foxtel, News's pay TV partnership with Telstra, has offered Australis about $230 million for distribution rights to its programming.
This would relieve Foxtel of a $US18.18-per-subscriber-per-month programming payment to Australis.
But this was dismissed as News Corp propaganda by other sources. One analyst maintained the refinancing would be concluded on more favourable terms than those revealed recently and would be announced in the next couple of days.
The refinancing was originally reported to involve TCI/Lenfest and News providing a $US150 million bank guarantee or loan, convertible into Australis shares at about 55c a share after six months if not repaid or discharged by new long-term financing. TCI/Lenfest and News would also get options or warrants over up to 10 per cent of Australis's capital exercisable at 20-30c a share as the upfront price of the rescue.
© 1996 Sydney Morning Herald
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