Australis Insolvent

Australis Insolvent

Tokyo, Japan, 19 May 1998 (SAT-ND) -- A court ordered that troubled
satellite pay television operator Australis Media Ltd be put into
liquidation, Australis's receiver Ferrier Hodgson said. The appointment of
a liquidator would not interfere with its negotiations to sell the business
and Australis' Galaxy channel would continue transmitting programmes,
Hodgson added.

Australis, which has generated accumulated losses of more than A$700
million since 1993, was placed in receivership two weeks ago by its U.S.
bond-holders. Australis owes them US$500 million.

According to Telstra Corp, the Supreme Court of New South Wales found that
Australis had defaulted on its obligations to senior bondholders and was
now insolvent. Telstra said it was satisfied with the decision--hardly a
surprise as Telstra and Keith Rupert Murdoch's News Corp own the rival
pay-TV group Foxtel.

Nonetheless, there's a 25-year film distribution agreement between both
groups which Foxtel wants to get out of. News Corp has argued earlier that
the distribution agreement had to be terminated if Australis is insolvent.
This would allow Foxtel to negotiate a new deal with Hollywood studios,
which analysts suggest would slash Foxtel's monthly programming costs by
more than half (US$7.70 per subscriber instead of the current US$17.)

Source: Sat-ND

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