oOh!Media has gone into a trading halt as the outdoor player told the ASX it is considering a capital raising following a significant drop in share prices.
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.
It is understood oOh! is considering capital raising to reduce its debt after the media company’s shares have been steadily sold off in the past month amid fluctuating economic conditions.
oOh! had $355 million net debt at the end of last year.
Earlier this week, the company withdrew its earnings guidance amid uncertain market conditions.
An oOh!Media spokesperson told B&T the trading halt reflections discussions the company is having with its major shareholders.
The spokesperson said: “Given the recent share price decline we think this is prudent. The company does not have liquidity issues, and oOh! enjoys long-term supportive relationships with our banking syndicate – the facilities do not expire until 2021.
“Short-term, this is all about talking to the shareholders, managing capex and implementing cost-control measures.”
The spokesperson stressed that capital raising is an option, but not the only option.
“First-quarter trading is in line with guidance. However, near term visibility is uncertain given the unprecedented market conditions we’re in. For us, it’s about how we make sure we’re managing the short-term volatility, while ensuring the business is well placed to leverage the opportunity when the market stabilises and recovers. And they will recover.”
The spokesperson said the long-term fundamentals for OOH are still positive.
“There’s no doubt that like the rest of the world and companies in every sector, OOH is undoubtedly being impacted by coronavirus.
“What we’re seeing is a change in how advertisers are using OOH. Audiences are still around. While they are not travelling to the office or flying domestically or internationally, they’re still out and about, still going to local shops and they’re still going out for exercise.
“They are moving around more locally, and our network is local media. So brands still need to have a presence to make sure they emerge as strong or stronger when we come out of this challenging time.”