APN seeks $127m from rights issue

Herald publisher APN News & Media will raise up to A$99 million ($127 million) in a pro rata rights issue but Irish shareholder Independent News & Media will not participate and will therefore have its stake diluted.

Other capital management initiatives announced with the rights issue include scrapping the interim dividend and a dividend policy that will "reflect appropriate conservatism in line with prevailing economic conditions".

ASX and NZX dual-listed APN, which also publishes titles such as NZ Woman's Weekly and the Listener and owns half of broadcaster TRN, will issue new shares on a one-for-five basis priced at A$1 each, a 16 per cent discount to their closing price on Monday.

It plans to raise A$79 million from institutional investors, with any rights - which are not tradeable - that are not taken up being offered to other investors via a subsequent book build. The institutional portion of the offer will be underwritten by Royal Bank of Scotland.

It will also raise up to A$20 million from retail investors, although it does not expect 100 per cent take-up.

APN's largest shareholder INM, with 39.2 per cent, will not participate. INM's stake will be diluted to just over 32 per cent, assuming 100 per cent retail take-up.

However, INM, which this week confirmed it had secured a grace period from creditors owed €200 million, has said it intends to remain a long-term shareholder in APN.

Having already announced a new A$54 million finance line from Commonwealth Bank of Australia, APN said it was negotiating with its banks to secure an extension to debt due to mature in December.

APN shares were down 5c to $1.60 when they were put in a trading halt ahead of yesterday's announcement.