ASX-listed outdoor advertiser oOh!media is out of a trading halt after raising $156 million to complete the institutional part of an emergency $167 million capital raising. US investment firm HMI Capital is providing $17.7 million, which could leave it with 25 percent of the company. oOh!media also announced a cost-cutting drive of $45m-65m.
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| oOh!media and its publishing business Junkee Media have launched a new campaign promoting kindness, consideration and compassion during the COVID-19 crisis |
“We were very pleased with the strong level of support of the offering from both our existing and new shareholders,” said oOh!media’s chief executive Brendon Cook, who is now planning to stay on as CEO at least until the end of the year, after announcing his departure two months ago.
“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,” he said.
HMI Capital founder Mick Hellman will join the oOh!media board as a non-executive director. HMI committed to underwriting of up to $17.7 million, which could increase its stake in oOh!media from 19 percent to 25 percent.
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| "No intention of making anyone redundant": oOh!media CEO Brendon Cook |
“The Placement and the institutional component of the Entitlement Offer (Institutional Entitlement Offer) closed on 27 March 2020, raising approximately A$156 million,” said a company statement to the ASX on Friday. “The Offer price was A$0.53 per New Share. The Placement received strong demand and raised gross proceeds of approximately A$39 million. The Institutional Entitlement Offer was well supported, with a take-up rate from institutional investors of approximately 91%. The Institutional Entitlement Offer raised gross proceeds of approximately A$117 million.”
Cook told The Australian that the company, owner of large format business Cactus Imaging, was hoping to pay down debt of $354 million and would commence a cost-cutting drive of $45m-65m.
“Our first goal is get people to use up all their leave and various other activities,” he said. “We have no intention of making anyone redundant.”
The trading halt followed oOh!’s announcement earlier this month that it was withdrawing its annual earnings guidance because of the downturn caused by COVID-19.
“The Company has over 9 months remaining in FY20 and due to the evolving macroeconomic conditions and the resulting market uncertainty caused by COVID-19, forecasting of full year revenue in the current environment is difficult,” it said.
The retail component of the Entitlement Offer is expected to open on Thursday, 2 April 2020 and close at 5.00pm (Sydney, Australia time) on Thursday, 16 April 2020.
