Viaplay Group Faces Share Plunge After Financing and Debt Renegotiation
Nordic streaming company, Viaplay Group, sees an 83% drop in share prices following financing and debt renegotiation.
Viaplay Group, a Nordic streaming company, experienced a significant drop in its share prices, declining by as much as 83% in early trade. The sharp decline was a result of the company's recent announcement regarding a financing and debt renegotiation package. While the package aims to address Viaplay's near-term financial situation and fund future development, it will result in a substantial dilution for existing shareholders.
As of 11:21 GMT on Friday, Viaplay Group's shares were down SEK17.33 pence, or 73%, at SEK6.37. The shares had even plummeted to a low of SEK4.06 earlier in the session.
To raise capital, Viaplay Group plans to initiate a share issue at SEK1.0 per share, aiming to secure 3.1 billion Swedish kronor ($295.2 million). This share issue will be supported by various shareholders, including Canal+ from Vivendi and PPF Group, who will collectively invest SEK2.7 billion. Canal+ currently owns 12.2% of the company's issued share capital, while PPF owns 6.4%.
Additionally, the company aims to raise an additional SEK900 million through a rights issue at the same share price. Nordea Asset Management, which holds a 7.7% stake in Viaplay Group, has announced its intention to participate in the rights issue to maintain its shareholding.
This strategic move by Viaplay Group signifies a significant shift in its financial structure and future prospects. While it may present temporary challenges for existing shareholders due to share dilution, the investment from prominent shareholders and the funds raised will contribute to the company's growth and development in the longer term.
Viaplay, a leading Nordic entertainment provider, has recently announced the successful raising of new funds. Alongside this, the company has agreed to a significant write-down of its existing debt obligations. The write-down amounts to SEK2 billion, with SEK500 million being converted into equity at SEK1.0. These financial measures are crucial for the survival and future growth of Viaplay.
Chairman Simon Duffy stated that this comprehensive package, combined with operational measures, marks a new beginning for Viaplay Group. The company is determined to reinforce its position as the leading provider of entertainment in the Nordic region. The ultimate goal is to return to generating profitable growth and delivering healthy shareholder returns in the near future.
Earlier this year, Viaplay undertook a thorough review of its funding issues and initiated a major strategy reset. During this process, various options were considered, including content sublicensing, asset disposals, equity injections, or even the sale of the entire company. As a result, Viaplay made the strategic decision to focus on its core operations in the Nordic region, Netherlands, and Viaplay Select. In tandem with this focus, the company will downsize, partner with others, or withdraw from the remaining international markets such as the U.S., U.K., and Canada.
These recent developments signal a clear path forward for Viaplay Group. With a fresh influx of funds and strategic adjustments, the company is poised to navigate challenges and emerge stronger in the ever-competitive entertainment industry.
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