Fairfax Media has finalised its sale of New Zealand online auction house Trade Me.
The media company announced today it had completed the sale of its 51 per cent stake in Trade Me at about $3.05 a share.
The sale yields $616 million for Fairfax - publisher of The Sydney Morning Herald and The Age. Fairfax paid $NZ700 million for the entire business in 2006.
Fairfax Media chief executive Greg Hywood said on Tuesday that the sale’s proceeds would "provide us with a very strong balance sheet and the financial flexibility to invest and complete the company’s structural transformation".
‘‘Trade Me’s strong performance has given rise now to an opportunity to reduce debt and provide greater financial flexibility,’’ Mr Hywood said.
The sale cuts Fairfax’s net debt below $200 million.
While the Trade Me sale was supported by some of Fairfax’s major institutional shareholders, it also deprives the company of a key source of digital earnings.