Prime time funding
Regional television group passes the hat round in a difficult period for operators of listed media assets.
Prime Media Group has jumped on the capital raising bandwagon to shore up its balance sheet and pay down debt.
The announcement to raise $110 million – with major shareholder Paul Ramsay committing $25 million – comes a month after Ten Network's failed attempt to raise $90 million (see Instos turn off Ten, February 19).
The key difference between Prime and Ten however is that Ramsay is backing the issue, unlike Ten's major shareholders Canwest and Bruce Gordon, a fellow billionaire regional TV mogul, soccer enthusiast and septuagenarian.
Seven Network subsidiary Network Investment Holdings will also stump up $25 million, committing up to 14.9 per cent of Prime's expanded capital base. Seven already shares its programming with Prime, which operates outside of metropolitan areas. All up, $85 million has been pledged from Ramsay, Seven and a number of Prime's major institutional shareholders.
The raising will comprise a ten for seven renounceable pro-rata offer at 48 cents per new share and a placement to Seven at the same price. The offer represents a 17 per cent discount to the previous closing price.
Ramsay said in a statement that the issue would put the company in a position to weather the economic environment. Despite the notion that people stay in and watch TV during recessions, media companies have not been immune to the downturn. Fairfax Media also launched a bid to raise capital last month with a $684 million three-for-five non-renounceable rights issue, which closes this Friday (Fairfax ups the ante, February 27).
Approximately $500 million has been raised from institutional investors through the efforts of underwriters UBS and ABN Amro.
A Citigroup team led by Mark Bartels was unlucky with the failed Ten offer. The market is now awash with rumours that Manitoba-based Canwest, in deep financial troubles of its own, will offload its 56.6 per cent stake in Ten for about $400 million. CanWest is facing a series of deadlines for $C3.7 billion ($A4.4 billion) worth of debt in the coming months.
As to Prime, things look better for it and its advisers at Macquarie Capital. In an unrelated but interesting announcement silver doughnut satellite Macquarie Communications Infrastructure (MCIG) has ruled out a capital raising of its own.
MCIG, which invests in communications infrastructure, notably through a 100 per cent interest in analogue transmitter Broadcast Australia, yesterday reported a 2.5 per cent rise in proportionate EBITDA for the six months to December 31. MCIG nevertheless reduced distributions in November and appears as worried as anyone else in the sector on the market for media equity and debt.
The announcement to raise $110 million – with major shareholder Paul Ramsay committing $25 million – comes a month after Ten Network's failed attempt to raise $90 million (see Instos turn off Ten, February 19).
The key difference between Prime and Ten however is that Ramsay is backing the issue, unlike Ten's major shareholders Canwest and Bruce Gordon, a fellow billionaire regional TV mogul, soccer enthusiast and septuagenarian.
Seven Network subsidiary Network Investment Holdings will also stump up $25 million, committing up to 14.9 per cent of Prime's expanded capital base. Seven already shares its programming with Prime, which operates outside of metropolitan areas. All up, $85 million has been pledged from Ramsay, Seven and a number of Prime's major institutional shareholders.
The raising will comprise a ten for seven renounceable pro-rata offer at 48 cents per new share and a placement to Seven at the same price. The offer represents a 17 per cent discount to the previous closing price.
Ramsay said in a statement that the issue would put the company in a position to weather the economic environment. Despite the notion that people stay in and watch TV during recessions, media companies have not been immune to the downturn. Fairfax Media also launched a bid to raise capital last month with a $684 million three-for-five non-renounceable rights issue, which closes this Friday (Fairfax ups the ante, February 27).
Approximately $500 million has been raised from institutional investors through the efforts of underwriters UBS and ABN Amro.
A Citigroup team led by Mark Bartels was unlucky with the failed Ten offer. The market is now awash with rumours that Manitoba-based Canwest, in deep financial troubles of its own, will offload its 56.6 per cent stake in Ten for about $400 million. CanWest is facing a series of deadlines for $C3.7 billion ($A4.4 billion) worth of debt in the coming months.
As to Prime, things look better for it and its advisers at Macquarie Capital. In an unrelated but interesting announcement silver doughnut satellite Macquarie Communications Infrastructure (MCIG) has ruled out a capital raising of its own.
MCIG, which invests in communications infrastructure, notably through a 100 per cent interest in analogue transmitter Broadcast Australia, yesterday reported a 2.5 per cent rise in proportionate EBITDA for the six months to December 31. MCIG nevertheless reduced distributions in November and appears as worried as anyone else in the sector on the market for media equity and debt.
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