Fairfax Media, the media company battling to contain costs as consumers migrate to the internet for news, has sold down its stake in Trade Me to pay for a three-year restructuring of its newspapers that will cost A$248 million and result in 1,900 job cuts.
The Sydney-based company sold 59.4 million shares in Trade Me at A$2.70 apiece, in a fully underwritten placement for a total A$160 million, a 3.2 per cent discount to their price at the close of Australian trading on Friday.
It plans to hold its stake in the online auction site at 51 per cent. Trading in Trade Me shares was earlier halted but NZX advised that trading would resume at 12.53pm today.
The sale is part of an overhaul of Fairfax's ailing metro print business, which will see the Sydney Morning Herald and Age newspapers reduced to tabloid size from March next year, while their online presence will be put behind a paywall. Digital pricing details will be announced by the end of this year.
Fairfax said it remains open to quitting newspaper printing altogether if it no longer remains profitable, and it will shut two facilities by 2014. Fairfax hopes to lift annual savings to A$235 million by 2015.