Out-of-home player oOh!media has revealed a $167 million equity raising following a trading halt last week.
Meanwhile, chief executive Brendon Cook, who announced he would be stepping down from the role earlier last month, will remain in the position until at least the end of 2020 to help the outdoor player get through this period.
In a LinkedIn post, Cook said: “With this national crisis disrupting companies in every sector of the economy, we want to avoid any more disruption for the company, so with the full support of the oOh! Board, I will remain as CEO until at least the end of the year.
“Our focus has to be on adapting quickly, while looking after our staff and all our other stakeholders during what is a very difficult period for everyone. My mission is to help us get through all this in the best possible shape.”
As with many businesses, the OOH company’s share price has taken a severe beating amid the CV-19 pandemic.
At last look, the shares traded at $0.84. Analysts marked down oOh!’s revenue as commuters spend less time outdoors and more time at home in order to curb the CV-19 spread.
And now, oOh! has announced equity raising as a means to reduce its debt and “improve the company’s financial flexibility and liquidity”.
oOh! had $355 million net debt at the end of last year. Earlier last week, the company withdrew its earnings guidance amid uncertain market conditions.
The offer price is $0.53 a share, which points to a market capitalisation of around $200 million. The equity raised will be used to pay its debt, with the outdoor company also announcing it has found cost savings of $20 million to $30 million.
Capital expenditure will be cut by between $25 million and $35 million.
An oOh!media spokesperson said: “Today’s announcement is a positive sign for the company in challenging market conditions.
“It reflects the long-term value of the business, and good future prospects for the OOH sector in general once conditions ease.
“The announcement brings additional stability and certainty for all of oOh!s stakeholders – its staff, property partners, suppliers, advertisers and shareholders.
The spokesperson said it was “not a liquidity issue” but rather a means to “pursue measures that improved balance sheet flexibility,” given the uncertain economic outlook.
The spokesperson said: “In terms of current business conditions, like the rest of the world and companies in every sector of the economy, the Out of Home market is undoubtedly being impacted.
“There is a shift in how people are living their daily lives, with movements becoming more localised as individuals and families adapt their routines in line with social distancing and evolving government advice.
“Using its national network of assets, oOh! is working closely with its customers to adjust to these evolving social patterns.”