oOh!media completes institutional placement raising $156m

The outdoor advertising company wants to boost liquidity by a total $167m amid the coronavirus crisis.

Brendon Cook, chief executive, oOh! Media.

oOh!media has successfully completed its institutional placement of its equity raising with the aim of boosting liquidity in the struggling company by $167m amid the coronavirus crisis.

Coming out of a trading halt on Friday, the outdoor advertising company announced in a statement to the ASX it had completed the institutional entitlement offer and raised $156m.

The company hopes it will halt the share price slide that has hit a 52-week low of 59c, down from a high of $4.74. On Friday, the share price fell 27 per cent by mid-afternoon to trade at 61c.

“We were very pleased with the strong level of support of the offering from both our existing and new shareholders. The equity raising is part of our initiatives to provide the company with significant liquidity to trade through uncertain times ahead, and position oOh!media to continue leading the out-of-home industry which we believe is a long-term structural growth sector,” CEO Brendan Cook said.

“The placement and the institutional component of the entitlement offer (institutional entitlement offer) closed on 27 March 2020, raising approximately $156m. The offer price was $0.53 per new share. The placement received strong demand and raised gross proceeds of approximately $39m. The institutional entitlement offer was well supported, with a take-up rate from institutional investors of approximately 91 per cent. The institutional entitlement offer raised gross proceeds of approximately $117m,” the company said in a statement.

“Approximately 293 million new shares subscribed for under the placement and institutional entitlement offer are expected to be settled on Monday, 6 April 2020 and to be issued and commence trading on the ASX on Tuesday, 7 April 2020.”

The company is hoping to pay down debt of $354.5m and on Thursday CEO Brendon Cook told The Australian the company would commence a cost-cutting drive of $45m-65m, but vowed to make nobody redundant.

He said he was planning to stay in the top job at least until the end of the year despite announcing his departure two months ago.

He said the business, which employs about 850 staff in Australia and New Zealand, is “fit for purpose”, noting it underwent a major restructure following its $570m acquisition of Adshel from Here, There & Everywhere’s Adshel in 2018.

“Our first goal is get people to use up all their leave and various other activities,” Mr Cook told The Australian. “We have no intention of making any one redundant.”

The news comes after a very difficult week for the company, which was the first within the Australian media industry to dump its annual earnings guidance because of the fallout from COVID-19.

As revealed by The Australian’s DataRoom, the group’s $167m equity raising has been fully underwritten by Macquarie Capital, will consist of a placement to shareholders to raise about $39m, plus, an entitlement offer to raise $128m.

The raising, at 53c a share, represented a 37 per cent discount to its closing share price of 84c on March 19.

US investment firm HMI has backed oOh!media’s capital raising, which could result in its stake in the group jumping from 19 per cent to up to 25 per cent. However, that will depend on the investor demand during the raising, and will need Foreign Investment Review Board approval for HMI to increase its stake above 20 per cent.

oOh!media will appoint Mick Hellman, founder and managing partner of HMI, to its board, and will nominate one board director to resign temporarily until its annual shareholder meeting because at present the company can only have seven board directors.