Will SCA sell some regional radio assets?
In the wake of the sudden exit of SCA's Peter Lewis as CFO, it’s been reported today in the Australian that his departure was caused by a deep disagreement about whether the company should apply a huge writedown on its TV and radio licences, sell assets and launch a rights issue to raise capital.
SCA has taken big hits with declines in advertising caused by weaker TV and radio ratings.
With that, shares in the company are down by nearly a third year to date, which has wiped $400 million from the company’s market capitalisation. Adding further salt to the wound, it is expected the full-year net profit will fall 10 per cent below the previous year’s underlying NPAT of $89 million.
SCA could well be hanging out for the media laws to change if the government can push them through in October.
The Australian also revealed Southern Cross chairman Max Moore-Wilton commissioned a survey earlier this year asking fund managers and market analysts for their views on the company and its management. The company’s stock has been downgraded by investment banks, including Citi.
They also speculate that Southern Cross has also considered selling surplus assets, which may include some regional radio stations.