Struggling multi-media business Seven West Media Ltd (ASX: SWM) today announced it is to undertake a capital raising as it continues to adjust to soft advertising revenues for free-to-air television and print media businesses.
The capital raising aims to deliver $150 million to be used to reduce the debt load, while being able to continue investing to maintain market-leading positions in the free-to-air tv sector.
Viewers of free-to-air tv in Australia wouldn't be wrong in thinking it's run on tight budgets; as Channel 7 competes with rivals Nine Entertainment Co Holdings Ltd (ASX: NEC) and Ten Network Holdings Limited (ASX: TEN) in pursuit of viewers and advertising dollars.
Seven is attempting to swim with the digital current via online news service Yahoo7 and its launch of online streaming service Presto to leverage the shift to online viewing, but faces competition from US giant Netflix and other local rivals.
The keystone remains the Channel 7 television operation and its juicy advertising revenues, although given the uncertain outlook the stock looks one for bargain hunters to avoid for now.
Smart investors don't go looking for turnaround opportunities, they go shopping for gangbusters growth stocks on attractive valuations…
