Seven West Media refinances debt facilities
Seven West Media (SWM) has today refinanced its syndicated debt facility. The new facility delivers lower cost of funding, more flexible terms and maturity extended to October 2024.
The debt refinancing marks an important milestone in the company’s strategy, and reflects its focus in the past 24 months to reduce net debt by 57% to $240 million, and improve its balance sheet position to a leverage ratio below 1x by the end of the 2021 financial year.
The new facility funding costs are at 2.25% above Bank Bill Swap Bid Rate (BBSY), which is half the funding costs under the previous facility. The new facility is also revolving, which will require SWM to hold less cash on balance sheet, further reducing interest costs.
The previous facility’s COVID-era restrictions have also been eased, giving SWM greater flexibility to pursue its strategy. Financial covenants have reverted to those typical for a debt facility to a listed media company and provide ample headroom based on SWM’s most recent financial results. Previous restrictions on capital management have also been eased.
In August, Seven reported a 240% bump in profit to $125.5 million, with 7Plus, up 78% on the prior corresponding period. Digital earnings overall, meanwhile, grew 131% to $60 million.
Seven West Media managing director and chief executive officer, James Warburton, said at the time: “Our result today reflects the material progress of the changes made over the past two years.
“Since 2019, we have increased EBIT and grown our digital business to over 25% of earnings. We have a new entertainment schedule that is increasing ratings across all key demographics.
“We were the only network to grow commercial audience share across the key demographics in the financial year, which has set us up strongly to monetise this in FY22. At the same time, we have slashed our net debt position by 57% since FY19, giving us a balance sheet to pursue future growth opportunities.”
