Ten Network, Australia's third-ranked television network, announced a steeply discounted A$230 million($240 million) capital raising on Thursday as it struggles to buy hit programs to counter a weak advertising market.
The offer, priced at A$0.20 per share, a 38.5 percent discount to Ten's last closing price on Tuesday, is the company's second capital raising in less than six months.
Chief Executive James Warburton, who just months ago reassured investors that there would be no need to raise fresh cash, said advertising conditions and Ten's revenue performance had continued to deteriorate since it announced its full-year results on Oct. 18.
Australian newspapers and television networks are facing a tough market, with advertising depressed by a consumer spending drought and competition intensifying on the internet.
Ten reported a A$12.9 million loss for fiscal 2012, with advertising revenue down 14 percent as viewer ratings fell and it axed flops such as "Everybody Dance Now," hosted by Sarah Murdoch, daughter-in-law of News Corp Chairman Rupert Murdoch and the wife of Ten director Lachlan Murdoch.
The network, which also counts billionaires Gina Rinehart and James Packer among its top shareholders, competes with top-ranked Seven Network and the Nine Network.
Ten is locked in a spiral of falling ratings and revenue that makes it difficult for the network to buy the programs it needs to turn its fortunes around.
Ten said most of the proceedings from the capital raising will be used to repay a $125 million private debt due in March 2013, with the remaining proceeds used to fund restructuring costs and fund working capital for general purposes.
Following the capital raising, and the earlier A$200 million share placement, the company will have an overall net cash position of around A$45 million, it said. Warburton said Ten will continue to cut costs "whilst maintaining our programming schedule."
Key programs for the 2013 ratings season include "MasterChef" and "The Biggest Loser."
The company requested a trading halt, in force since Wednesday, remain until December 10. Media stocks have been among the market's worst performers in 2012. Ten shares have fallen about 60 percent so far this year.