Seven West Media announces $440m equity raising
Seven West Media will raise about $440 million to pay down debt amid ongoing tough market conditions.
The company, which owns the Seven Network and The West Australian newspaper, announced a profit downgrade in April, when it estimated that annual earnings would be in the range of $460-$470 million.
“Since April, the wider advertising market has remained subdued and Seven West Media expects these market conditions to continue in the near term,” the company said in a statement.
“Notwithstanding these market conditions, Seven West Media now expects its full year 2012 underlying operating EBIT [earnings before interest and tax] to be approximately $473 million, slightly above the previous range (subject to any year-end audit adjustments including, but not limited to, non-cash impairment assessments).”
The equity raising will reduce Seven West Media’s net debt from approximately $1.875 billion to approximately $1,442 million. Seven West Media’s two largest shareholders, Seven Group Holdings (33.2 per cent) and KKR (11.8 per cent) have agreed to take up their full entitlements under the offer.
The new shares will be issued at $1.32 each – an 18.5 per cent discount to Seven West Media’s closing price of $1.62 on July 13.