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FAIRFAX SHARES SUSPENDED: Company in crisis has begging bowl out in desperate search for dollars

fairfaxsuspended fairfaxannouncement Fairfax Media is in a desperate attempt to deal with the cash crisis that confronts the company.

Its shares have been suspended while it negotiates with institutions to give it much-needed cash to keep the company within its soon to be breached bank covenants.

Current shareholders will take a hiding, if market expectations are met, because the new shares, if they can be placed at all, will be available at a deep discount to the current share price. One broker who spoke with VEXNEWS while in the queue at the Salvo’s told us that it would be as much as 10-15% discount “in this market, given the lack of confidence in media stocks and Fairfax in particular.”

That will mean a semi-permanent further decline in the Fairfax share price from the 90 cent range to the 80 cent range. That could be devastatingly bad news for major shareholder John B Fairfax who is said to be hocked to the eye-balls on his shares and is rumoured to be in breach of lending agreement covenants of his own at the 80cent a share level.

He’ll be hoping this move keeps the company alive for long enough so he can negotiate with his principal lenders.

Its horrifying to think the savings and retirement nest-eggs of Australians could be invested into the ongoing corporate nightmare of Fairfax Media.

UPDATE: The Australian reports Fairfax could be trying to raise as much as $500 million to pay down some $2.5 billion in debt. A huge amount that will massively dilute existing shareholders like John B. Fairfax who himself is believed to be in a debt crisis of his own.


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  1. 10-15% discount you reckon? Bullshit. Try more like 25% with stringent conditions.

    The existing financiers (ie debt holders) will make some very ugly demands of Fairfax which will aim for its survival rather than a location for harbouring lefties.

    Posted by Anonymous | February 26, 2009, 18:57
  2. It is exquisitely satisfying to see the principal promoters of of Earth Hour, the most profoundly and maliciously evil manifestation of the environment movement ever, get their financial deserts. I just pity the poor suckers who are tempted to give them more money. This justice couldn’t happen to a more deserving crowd.

    Posted by Timothy | February 27, 2009, 8:48
  3. Oh but they’ve just promoted Brian Cassell. He’ll save the day……not. Hang on JB, you’re in for a bumpy ride. How’s your tunnel vision BK. Alive and well I see.

    Posted by Splish | February 27, 2009, 20:41