Broadcaster Seven West Media has been in talks with its lenders ahead of withdrawing its guidance for 2020 citing a material fall in advertising market activity and loss of key 2020 sporting events due to the impact of the coronavirus.
It is unclear whether its bankers to the group, which is chaired by billionaire Kerry Stokes, have agreed to waive any breaches of covenants – certain financial and operational measures a company must meet until its debt is repaid – the group has over its enormous debt pile.
The media group stepped away from guidance it gave to shareholders in February following a severe downturn in advertising and suspension or postponement of productions and key events – most notably the AFL season and the Australian Olympic Committee’s withdrawal from the Tokyo Olympics. Nine Entertainment, owner of this publication, has also withdrawn its 2020 earnings guidance. Other productions, such as popular soap opera Home and Away, were also shut down to protect cast and crew from the spread of COVID-19.
Sources close to the broadcaster, who declined to be named due to the discussions with its lenders being confidential, said Seven had been in extended talks with its bankers in recent days as the coronavirus put its financial health under severe pressure. The group declined to comment on these discussions or on how many staff it had stood down but sources said several contractors, including cameramen, were now out of work.