APN News & Media went into a trading halt yesterday as it joined the dash for cash yesterday; one of a handful of smaller companies raiding super funds and other investors for capital top ups.
GrainCorp confirmed it had raised $60 million overnight, Hastie Group went into a trading halt as it looked for $77 million and property player, Goodman group confirmed a complicated $300 million lifeline from Macquarie Group.
APN wants a minimum of $79 million and up to $99 million from a share issue.
"APN wishes the trading halt to last from today until commencement of normal trading on Thursday, 21 May 2009 unless APN requests the trading halt to be lifted before that time," the company told the ASX.
APN also scrapped interim dividend for the 2009 financial year as part of savings directed towards debt reduction.
"Dividend policy for subsequent periods will reflect appropriate conservatism in line with prevailing economic conditions," APN said in a second statement.
It had paid an interim dividend of 10.5c a share for the first half of 2008. That will also mean less money for its embattled UK parent.
The equity raising comprises a one for five accelerated non-renounceable pro-rate entitlement offer at $1 per share, an 8% discount to Monday’s closing price of $1.19.
The institutional component, representing about $79 million is fully underwritten. The remaining $20 million of shares will be offered to retail shareholders.
It follows Fairfax among media groups which have raised capital from the markets to repay debt and keep banks at bay.
The company said that with the inclusion of the new $54 million, five year CBA asset finance facility and the underwritten portion of the Entitlement Offer, "the company will have in excess of A$200 million in unused debt commitments available to be drawn, providing ample financing headroom in relation to debt maturities".
It said its controlling shareholder, Independent News & Media will not be participating in the Entitlement Offer. That will see its 39% stake reduced to around 32%.
APN’s statement followed one from Independent News & Media overnight that it had been granted a six week standstill period by its creditors, and given 15 million euros in extra working capital.
That’s the first indication from INM on just how desperate its financial position is. The extra working capital will be secured over unnamed assets (are there any left in INM?).
INM had been unable top pay a 200 million euro loan which was due to be either repaid yesterday, or rolled over. The creditors owed the money could not agree on what to do, but gave INM the extra six weeks.
That is similar to the extensions currently being given to Canwest of Canada by its creditor banks and noteholders. Another deadline for the last extension falls this afternoon, Australian time.
Canwest controls the Ten Network in Australia, INM controls APN with a 39% stake which it couldn’t sell late last year to raise more capital.
Earlier this month, APN cut its annual earnings guidance because of the advertising slump and said Independent News remained a long-term committed major shareholder.
There was some talk among analysts that they thought APN should have sought to raise capital when issuing the downgrade at the AGM.
Two more companies seeking money from the market are Perth property group, Aspen and Sydney-based industrial building services and refrigeration company, Hastie Group.
Hastie said yesterday that it wants up to $77 million from its raising and says the board and major shareholder will contribute.
The company also reaffirmed its guidance for the current financial year but warned the 2010 financial year is expected to remain "challenging".
Hastie said it will raise up to $29 million through an institutional placement of about 25 million shares at $1.15.
As well it will raise up to $48 million through an accelerated one-for-four entitlement offer to existing shareholders, also at $1.15.
That’s a 22% discount to the market close of $1.48 on Monday.
Group Managing Director and CEO David Harris said “Hastie Group is undertaking this offer to reduce debt and provide increased financial flexibility.
"Hastie Group has a strong track record of growth and, despite short term market uncertainty, is well positioned to manage its way through the current challenging market conditions and deliver ongoing growth in the medium term."
The company said its earnings guidance for the current financial year remained unchanged at around 35c per share pre-offer.
Hastie has undertaken a detailed review of earnings in light of the current market uncertainty.
" FY09 earnings guidance remains unchanged at around 35.0 cents per share pre-Offer. After taking into account the dilutionary impact of the issue of shares under the offer, FY09 EPS guidance is around 34.0 cents per share.
"The outlook for FY2010 is expected to remain challenging across all of Hastie’s geographic markets.
"Hastie’s markets are going through a severe contraction but its focus on government related spending is expected to sustain demand.
"Hastie has an experienced and stable team and the strength of its business and service offering will enable the group to better weather the short term market difficulties and position itself for eventual market recovery."
Hastie
