The company announced that it was looking for alternatives to a capital increase, notably by studying the redemption track.
The US-based online radio service Pandora announced Monday a strategic review to explore alternatives to a $ 150 million capital increase, including a third-party buyout. In the wake of the release of its quarterly results, Pandora said in a statement that it had entered into an agreement with the investment company KKR, which plans to inject $ 150 million through the issuance of new shares . The new shares are convertible into ordinary shares and would represent, in total, approximately 4.4% of the capital, once converted, according to a calculation carried out by Agence France-Presse.
Loss of $ 342 million
Before this capital increase is finalized, the on-line radio group intends to "evaluate any strategic alternative, including a sale," said James M. P. Feuille, director of Pandora, in a separate statement. These announcements come as Pandora on Monday released a new net loss of $ 132 million, up 14.9% from the same period of 2016. For the full year 2016, the radio service Online reported a net loss of $ 342 million, more than double the $ 169 million reported in 2015.
The number of active users, one of Pandora's key data, decreased by 5.3% compared to the end of 2016, to 76.7 million. The number of paying subscribers continues to increase and reached 4.71 million, against 4.39 three months earlier. Pansolutiodora also announces that since the launch of a new on-demand subscription subscription offering called Pandora Premium, about 1.3 million people have subscribed to the trial.
Good reception on the stock market
A regular subscription, excluding trial period, costs $ 9.99 per month. The group began a race against time to reduce its losses, which continue to grow despite the increase in turnover (+ 6.2% to 316 million in the first quarter over one year). In September, Pandora launched a low-priced offer ($ 4.99 per month), which included ad-free radio, offline access and the ability to replay a song. The California group announced in January the abolition of 7% of the jobs of the group in the United States.
Investors reacted well to announcements of Pandora, the title gaining 3.17% in electronic trading after the close of the New York Stock Exchange, while the value had closed Monday's session down 2.62%.
SOURCE AFP
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