VILLAGE IN BID TO STRENGTHEN BALANCE SHEET
MOVIE World owner Village Roadshow has called a share trading halt as it seeks to raise $50 million to cut debt.
Village said it is asking for the trading halt to provide information about a potential capital raising, and expects trading to resume by Wednesday.
Cutting debt has been a priority for Village Roadshow, which, like rival Ardent Leisure, struggled in the wake of the tragedy at Dreamworld in October, 2016.
Village said, in an investor presentation earlier this year, that it has drawn down $381 million of its total $450 million finance facility as of December 31, 2017.
The company has taken a number of steps to cut debt, including last week selling Wet’n’Wild Sydney for $40 million to Spain-based Parques Reunidos.
Village said the sale of Wet’n’Wild Sydney will result in a pre-tax loss of about $25 million in FY18, and be used to reduce debt levels.
It has also sold, for $100 million, 154ha of land at Oxenford, which hosts its Gold Coast theme parks, under a sale and leaseback arrangement. Last year Village sold its half-stake in Singapore cinema business Golden Village for $165 million.
At the same time as offloading assets, Village has pumped money into its Gold Coast operation, opening the Top Golf facility at Oxenford after a $35 million investment.
The capital raising comes as the Village share price continues to struggle.
It closed last week at $2.18, close to half its value of $4.21 one year ago.
Village Roadshow has issued two profit warnings this year. Weak visitor numbers, compounded by a wet March and competition from the Gold Coast Commonwealth Games all caused problems.
Village expects its FY18 result to be between breakeven and a $10-million loss.