Rinehart tips into Ten's cash call

The mining billionaire Gina Rinehart decided to participate in the institutional component of the $230 million capital raising before the 5pm deadline on Friday. This ensured she would maintain her 10 per cent stake in the broadcaster.

Shares that were not picked up by institutional shareholders were to be redistributed for sale, but the word was that no main blocks of shares became available - a signal Mrs Rinehart had taken up her entitlement.

Investors are paying 20? a share and are entitled to four new shares for every five they own.

The stock was trading above $1.50 a share in November 2010.

The decision answered questions, for now, about whether Mrs Rinehart still has an appetite for media stocks after making significant losses on her investments in Ten and Fairfax Media, the publisher of The Sydney Morning Herald.

After the shareholders' meeting on Thursday Mrs Rinehart was blunt about Ten's shortcomings. "We have to be more prompt on where we could cut costs. Over the last two years, we could have done more there," she said.

"Obviously we're not doing well enough yet with our programming, so these are things that I hope we'll see some more improvements on. I think we're right to be heading to that particular age category (18-49) as our main demographic share, because they do a lot of the advertising."

Ten's chairman, Lachlan Murdoch, said on Thursday that he and the network's other billionaire shareholders, James Packer and Bruce Gordon, would participate in the raising, which he described as "prudent" given the deteriorating outlook for media.

"Poor execution of our spring programming schedule, compounded by a weak advertising market, has negatively impacted our results," Mr Murdoch said at the meeting.

He failed to give any words of support for the man who replaced him as chief executive less than a year ago, James Warburton.

Analysts said that the latest capital raising - on top of a $200 million raising in July, and the sale of the company's outdoor advertising business in October for about $100 million - addressed concerns about its balance sheet but not the company's operational issues.

JP Morgan analysts said they were forecasting an 18 per cent revenue decline for Ten in the current half year "given the poor ratings start to the year, in a weak TV advertising market".

Ten has even lost share in the 18-49-year-old audience that it is targeting, according to Deutsche Bank which said the company generated no operational cash flow for the first quarter. "We suspect cash flow will look worse in the second quarter due to annual licence fees and programming costs," Deutsche said.

But it added there was room still for three commercial broadcasters in Australia.

"In our view Ten remains a viable third option for advertisers despite the weakness in its ratings, particularly given its attractive younger demographic."