Foxtel Circle Overseas Investors For $2B+ Refinancing
Foxtel parent company, News Corp, is reportedly canvassing Asia-based debt investors as part of a $2.5 billion refinancing. The news comes as the pay-TV provider continues to face pressure from Stan, Netflix and Disney+.
According to the Australian Financial Review, overseas investors have expressed interest in Foxtel’s debt, citing its available cash flow to handle repayments.
The pay-TV provider has continued to grapple fluctuating customer churn, coupled with rising production costs and pricey sports rights from its first LIVE 4K TV Channel (Channel 444).
Lead by Chief Executive, Patrick Delaney, management has pledged to turn the company around despite market pressures and previous internal flux.
Some commentators question what rates banks and lenders are proposing, whilst Foxtel embarks on its turnaround strategy.
Foxtel reportedly has US$1.33 billion in borrowings, which mature at different times – e.g. two US private placements for $US150 million and $US74 million reportedly maturing in July and September.
On Friday, News Corp also confirmed a $300 million shareholder loan to Foxtel – used to pay an expiring facility.
As previously reported, for the most recent quarter Foxtel revenue and EBITDA notched US$539 million and US$98 million respectively.
For the quarter, News Corp’s subscription video service segment (i.e. Foxtel) notched a 13% drop in pro-form quarterly revenue to US$84 million.
The company asserts US$53 million of the decline stems from negative currency movements.
Foxtel has sought to further invest in streaming, expanding its target base from traditional broadcast customers.
On Friday, News Corp disclosed Foxtel has a total subscriber base of 3.1 million (as at April 30).
Over 700,000 of these customers are paying streaming subscribers for Kayo Sports and Foxtel Now.