Seven West Media secures $289m raising

Seven West Media has raised $289 million by selling new shares in the company to pay down debt and strengthen the balance sheet.

Seven West Media has raised $289 million by selling new shares in the company to pay down debt and strengthen the balance sheet.

The owner of the top-rating free-to-air Seven Network said 77 per cent of institutional shareholders took part in a capital ­raising.

The move is part of a plan to remove an overhang of convertible preference shares owned by its biggest shareholder, media and mining mogul Kerry Stokes’s Seven Group Holdings. Depending on the take-up of remaining shares among retail shareholders, Mr Stokes could see a slight increase to his current 35 per cent stake in Seven West.

If the preference share deal is approved by non-Seven Group shareholders at a general meeting on June 2, it will result in the early resolution of the preference shares.

The conversion is roughly a year earlier than the redemption date, easing a major concern for shareholders.

It will also put a significant dent in a $1 billion debt pile, leaving Seven in a better position to retain the AFL’s record media rights and mount corporate takeovers should the media laws change.

Seven unveiled a 2.27-for-three conditional, accelerated, non-renounceable entitlement offer open to all shareholders excluding Seven Group at $1.25 per share. Seven has said it plans to raise between $150m and $612m.

The retail component of the offer will open on May 8, and will close on May 28.

Chief executive Tim Worner declared a successful result to the institutional component of the rights issue.

“The strong level of interest from our institutional shareholders says a lot about their support for Seven West Media and the strategy we’re executing,” Mr Worner said.

“It’s an endorsement of not just the proposed transaction and the early resolution of the CPS (preference shares) but also another big step in the company’s transformation.”

Amid tepid conditions in the advertising market, Seven is facing cost inflation as programming gets more expensive and the AFL prepares to auction its coveted media rights.

The code has big ambitions of securing the richest sports deal in the history of Australian television.

“The proceeds committed are well in excess of the minimum underwritten amount and at the upper end of expectations with take-up from our largest shareholders and across the register more broadly,” Mr Worner said.

“We look forward to having a simplified balance sheet with substantially reduced debt.

“ Seven West Media is very well positioned at a time of industry change and we continue to focus on extending the leadership of our businesses.”