Ten bet all on Foxtel to survive. From Ten’s full-year financial results report and its $77 million fundraising from shareholders (and the $77 million Foxtel is going to inject) it is clear the network bet all on the Murdoch clan’s pay TV company winning approval to buy its stake over the final months of its 2014-15 financial year. In fact, you could say the board and management bet the company by spending big on new programming, promising to pay more for that programming this financial year, using up a surge in revenue, and boosting debt by $40 million over the final six months. — Glenn Dyer

The simple maths. The fundraising and Ten’s debt tell the story: the issue and the Foxtel deal will raise a gross figure of around $154 million — the debt at the end of August was a net $131.4 million, and once the money is raised and banked, the network will have an “overall cash position of up to $14.6 million”. Seeing Ten had cash of $14.4 million at August 31, that’s hardly a big improvement, except for the removal of the debt millstone. That debt figure jumped from just over $90 million at the end of the first half (February 28) to August’s closing figure of $131.4 million. That’s running up debt of more than $6 million a month. Ten actually owed $135 million on the CBA debt, as well as $10.8 million in capitalised interest (that is interest not being paid, but being treated as an asset) and more than $11 million in shareholder guarantee fees that will be paid to Lachlan Murdoch, Bruce Gordon and James Packer. The net cash of $14.4 million reduced the debt to the net figure in the accounts. But the fundraising will effectively replace the gross debt figure and the capitalised interest. — Glenn Dyer

Ten was dead in the water … So without the fundraising, especially from Foxtel, Ten was a dead duck and slowly being strangled by the draw-downs and capitalised interest on the $200 million revolving credit from the Commonwealth Bank. While that was not due until late 2017, Ten had no way of repaying that without a new source of cash — hence the Foxtel deal and the separate share issue. Ten was struggling to survive without a new injection of cash, despite the clear improvement in the network’s second-half ratings and financial performance after the first-half clean-out, especially of its over-valued TV network. So the bottom line is that thanks to the regulators, Ten, the Murdochs, James Packer, Bruce Gordon and Gina Rinehart all neatly avoided being the joint winner of the Frank Lowy Biggest TV Loser (Ten division). — Glenn Dyer

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Oh, what a recall. There was a fair bit of publicity overnight about Toyota regaining its top ranking as the world’s biggest car company by sales in September, pushing Volkswagen from the No. 1 slot it had moved into at the end of the June quarter. The VW diesel emissions rort had nothing to do with the change — it broke in September and too late to impact sales. Japan’s biggest car company sold 7.49 million units in the quarter, VW, 7.43 million. That was despite a 1.5% slide in sales for both companies in the quarter as the slump in emerging markets (Russia, Brazil and to a lesser extent, China) hit hard.What will be of interest is the impact this quarter on the sales totals for VW because of the emissions debacle. But many business and industry commentators are treating Toyota with kid gloves when it comes to problems with cars. It is perhaps the most recalled car maker around the world in recent years.

Last week 6.5 million cars around the world were recalled for problems with a window winding mechanism, the second time in the last couple of years that a recall has been issued for this fault (and by the way, that recall covers 300,000 cars in Australia, and VW’s, only 90,000). A total of just on 11 million VW vehicles are involved in the recall. There were other recalls of 2.9 million for a faulty airbag made by a supplier, and a 6 million recall last year, as well as 7 million in 2009 for brake problems. And some of those were for serious faults that had led to deaths on some occasions in some cars. In fact, from 2009 to 2015 just on 30 million Toyota cars have been recalled, or twice annual sales. Oh, what a recall indeed! — Glenn Dyer

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Peter Fray
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