Ten Network is in danger of having to conduct its second capital raising in less than six months, after the $145 million sale of its outdoor advertising business hit a hurdle.
Ten on Wednesday announced that an agreement made in July to sell its Eye Corp business to Outdoor Media Operations (OMO) for as much as $145 million had been terminated.
However, it also said that it was still in talks with OMO over the potential sale.
OMO is owned by private equity firm Champ Private Equity.
"While Ten has reserved its legal position regarding the purported termination, Ten and OMO remain in discussions with the aim of agreeing amended sale terms," the broadcaster said in a statement.
Shortly after the announcement, Ten shares dived 7.46 per cent, or 2.5 cents, to a record low of 31 cents.
Bell Direct analyst Julia Lee said if the sale fell through, or the sale price was much lower, then Ten may have to conduct its second capital raising this year because it had planned to use the funds from the sale to pay down debt.
She said Ten's $200 million capital raising in June was highly dilutive and she expected that the same would happen if it was forced to do another one.
Ms Lee said the failure of the sale would also mean that Ten would have less money to spend on content and, considering the network was languishing in the ratings, it needed to invest in its programs.
"The fact that there's no sale means they are a bit restricted in their spending in regards to trying to revive the television business and it raises the possibility of another capital raising," she said.
Ms Lee said it would be difficult to find another buyer considering the current structural challenges in the media industry.
The announcement follows speculation earlier this week that OMO had expressed concerns about Eye Corp's financial performance.
In response, Ten said on Monday that its negotiations with OMO over the sale terms were ongoing.
Ten is due to release its full year results on Thursday.
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