Seven West seeks to raise $440m

Seven West Media is turning to shareholders to raise $440 million to help reduce its debt pile while advertising markets remain subdued.

Seven on Monday also flagged that it now expected its full year underlying earnings before interest and tax to be about $473 million, slightly above its previous forecast of $460-470 million.

The group said the capital raising was needed because the wider advertising market remained subdued, conditions it expects to continue in the near term.

"Despite the difficult market conditions facing all Australian media companies, I remain optimistic about the longer-term growth outlook for Seven West Media," chairman Kerry Stokes said.

"The pro-rata offer has been designed to ensure all shareholders are able to participate equally in this growth."

The capital raising is based on a one-for-two accelerated renounceable entitlement offer of new Seven West Media shares at $1.32 each.

Seven said it would use proceeds from the capital raising to pay down its $1.875 billion net debt pile.

The offer represents an 18.5 per cent discount to Seven West's closing share price of $1.62 last Friday.

Seven said its two largest shareholders, Seven Group Holdings and KKR, would take up their full entitlements under the capital raising offer.

Meanwhile, shareholders will receive a dividend of six cents a share in October and April.

Seven said that from July 2013, and subject to Seven's operating performance, market performance and financial position, the company would pay annual dividends representing about 50 per cent of its net profit.

Seven's shares have been placed in a trading halt and are expected to resume trading on Thursday.

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