Seven West Media, which owns Australia’s Seven Network, has laid out a plan to raise up to A$612 million (US$488.9 million) through a new rights issue.
Depending on shareholder take-up, the A$1.25 per share issue could raise between A$150 million and A$612 million, a filing to the Australian Stock Exchange revealed.
SWM also wants to close out its existing convertible preference share (CPS) agreement with parent Seven Group Holdings that related to the formation of SWM in 2011.
This deal, subject to shareholder approval and considered “not fair but reasonable” by auditor Deloitte, would allow for a conversion of A$250 million in CPSs held by SGH at an issuing price of A$1.28.
This comes about a year before the CPSs’ redemption date, but is being pursued to remove “current uncertainty” around the share structure.
SWM’s independent board chairman David Evans said newly-raised funds would lead to a “strengthened balance sheet with reduced gearing and a simplified capital structure”.
SWM was formed four years ago when West Australian Newspapers acquired Seven Media Group for around A$4.1 billion. SCH received around A$1.1 billion in WAN shares as part of the deal, becoming SWM’s largest shareholder in the process.
It was at this point when the current CPS agreement was formed.
Among other assets, SWM operates Seven Network, digital channels 7Two and 7mate and Seven’s holdings in joint venture on demand platform Presto.