Sweden's Viaplay to raise equity, restructure debt in rescue plan

© Reuters.

OSLO (Reuters) -Struggling Swedish streaming company Viaplay on Friday said it planned to raise new equity and restructure its debt in a rescue plan that would wipe out most of the value of the company’s existing shareholders.

Under pressure to stabilise its business as rising living costs dent consumer demand, Viaplay in June replaced its CEO and has repeatedly warned of a weakening business environment that has sent its share price tumbling 88% year-to-date.

Viaplay in a statement said it aims to raise 4 billion Swedish crowns ($380 million) in new equity, write down 2 billion crowns in debt and renegotiate the terms of debt totalling 14.6 billion crowns.

“This extensive package and operational measures are absolutely necessary to secure the survival of the company, and this marks a new beginning for Viaplay Group,” board Chair Simon Duffy said.

The company plans to issue 4 billion new shares at a price of 1 Swedish crown each, a 96% discount to Thursday’s closing price of 23.68 crowns on the Stockholm bourse.

New shares worth 3.1 billion crowns will be sold to specific investors via a directed issue and the remaining 0.9 billion crowns will come from a rights issue, the company added.

The plan was backed by key shareholders including Canal+ and PPF, while funds managed by Nordea Asset Management planned to take part in the share issue and keep their joint stake of 7.7%, Viaplay said.

The plan, which will be voted on by shareholders, also requires the support and approval of debt providers and bondholders.

“The Board has carefully evaluated various alternative solutions and believes that the coherent recapitalisation programme is the preferred way to secure the survival of Viaplay Group given the current circumstances,” it said.

The group also reported an operating loss for the third quarter of 538 million crowns, taking its nine-month loss to 7.4 billion crowns.

Viaplay in July announced layoffs and said it would focus on its core Nordic, Dutch and Viaplay Select operations, while downsizing, partnering in, or leaving other markets. On Thursday the company said it had sold a British business.

($1 = 10.4714 Swedish crowns)


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