Glenn Dyer writes:|
Mar 25, 2009 12:00AM |EMAIL|PRINT
It’s tough being a junior media magnate when, after a couple of badly timed or ill-thought out decisions, you find yourself a bit short of the readies when the banks come calling. John B Fairfax has felt the ignominy of being unable to keep up appearances by falling short of the millions needed to maintain his family’s position at the former family company. Now Paul Ramsay, the boating media and health care magnate in Sydney, has found himself short of enough loot to keep up appearances at one of his family companies, Prime Media.
So what did he do? He phoned a friend in Kerry Stokes, who obliged and put his hand into Seven’s kick and came up with a spare $25 million. Just a call and Kerry Stokes got Seven network to chip in to the much needed $100 million-plus fund raising for Prime Media Group.
Otherwise, it could have been touch and go for Prime and for Seven that might have meant embarrassment for a big regional TV affiliate that strayed from its strategy when credit was cheap. Paul Ramsay’s Prime Media Group yesterday confirmed that Kerry Stokes’ Seven Network will contribute the fund raising designed to ease growing financial pressures on the regional TV broadcaster. The cash call is so big that Ramsay, who’s the major shareholder, was unable to contribute up to his level of shareholding in the company of 43.32%.
The fund raising, up to $110 million in new equity to pay down debt, reveals Ramsay will contribute less than his full entitlement. The statement said he would contribute $25 million for 65% of his entitlement.
That will see his stake watered down to around 30%, depending on just how much money is raised. In fact the fund raising is much bigger than the market value for Prime, which is valued at $77 million at 60 cents a share.
Seven, which provides the programming for Prime’s TV stations in much of regional Australia, will get a 14.9% stake in Prime through the equity raising. It can’t take any more because it would fall foul of media audience limits. Seven controls the regional TV broadcaster, Seven Queensland. The deal will give it the widest control and coverage of any Australian TV Network, in front of the WIN group of Bruce Gordon, which controls the WIN regional TV broadcasting business, and the Nine network stations in Adelaide and Perth.
It means Seven adds this stake in Prime to its 47% stake in the Seven media Group and 22% of West Australian Newspapers, as well as smaller stakes in other listed companies, including GRD Holdings. Seven also has stakes in a couple of underperforming technology companies, such as Unwired. It’s much the same way as John B Fairfax and his Marinya Media couldn’t stump up for its full entitlement in the $480 million fund raising Fairfax Media made earlier this month. His family could only put in $12 million, well short of their 12% stake of the fund raising which was close to $60 million. The two fund raisings prove that Kerry Stokes is the last media magnate/billionaire standing in this country.