Craig Hutchison has reportedly sold off a stake in his Sports Entertainment Group (SEG) sports business, a portfolio including the NBL’s Perth Wildcats and the new Melbourne Mavericks Super Netball team.
The company is reportedly looking to reduce its $28.7 million debt as repayment deadlines to the Commonwealth Bank loom in August.
Stream Over 50 Sports Live & On-Demand with Kayo. New to Kayo? Start Your Free Trial Today >
The Herald Sun reported the business had raised $1.5m for a 3.75 per cent share in the teams between October and December, with the money put towards repaying the bank.
SEN Teams, which also includes WNBL team Bendigo Spirit and NZNBL teams Otago Nuggets and Southern Hoiho is valued at a reported $40m with 4200 shares sold.
“SEG is seeking to raise further funds for a share in its sports teams business, unlocking the strategic value created through its ownership of four professional basketball teams and one professional netball team,” the filing said.
SEN Sunday morning presenter and New York-based share trader David Alcaro paid for $1m worth of shares, Perth Wildcats superman and retired BHP Billiton mining executive Bill Bloking invested $400,000, and beauty entrepreneur Jodi Millhahn contributed $100,000, according to the Herald Sun report.
The report added that the Commonwealth Bank could call in the loans at any time after SEG had breached its banking covenants, as its debt to value ratio was too high.
Hutchison spoke with The West Australian, revealing: “We’ve been open to the possibility of a minor share holding group joining us.
“We think there is incredible value in the SEN Teams world that we are building that can continue to be reinvested in the respective clubs.
“We will have more to say about that at the end of the month.
“SEN Teams is not for sale. Not at all. Not even in the slightest. We’ve been building that business – that arm of the business. We’ve been investing in more teams.
“We’re excited about netball coming on board and we’re off to a fantastic start with announcements we have made on various partners and sponsors. We’re very excited about where Perth Wildcats is heading and where we have got to.
“There is an opportunity to, like some of the other sporting teams have done around the NBL, in having some other like minded investors who share that vision and share that journey in a minor perspective. But we will maintain our majority ownership in all teams.”
However, SEG added in the filing to the ASX that they would continue to look for investors.
Hutchison added that adding owners wouldn’t affect the teams’ performance.
It comes after SEN posted a $9.2m financial loss last financial year.
By November, reports were emerging that there was “material uncertainty” with significant doubts about its ability to continue to operate as the company looked for new investors.
It also saw SEN sell off its New Zealand radio stations bought just two years earlier back to New Zealand TAB.
Hutchison, the company’s managing director and second-largest investor, hit out at the reports the company was in trouble, calling them “laughable” on his podcast The Sounding Board in November.
Barrett branded the situation “a two-month, sustained, personal attack” on Hutchison.
“The facts haven’t changed. Let me run over them again,” Hutchison begins.
“Our business made less than $5 million profit and … our debt has become quite famous, it’s $28 million or about 12 weeks of turnover.
“That’s on the public record and we’ve been very public since June that we’re seeking to reduce that.”
When asked if it was a financially crippling situation, Hutchy quickly responded: “That’s quite laughable. It’s really laughable.
“And the way it gets covered and portrayed is like I’m the bank and it’s my money and I’m overspending.
“The reality is I’m the second largest shareholder in the business. The largest shareholder is Viburnum, which is a strategic, financially rational company with a great track record and success story and is a more than $500 million fund.
“Would we like to get our debt down a bit? Yes, we’ve been public about that. A lot of the numbers you read, in fact all of the numbers I read (in an article published) on Sunday were inaccurate bar none.
“We didn’t pay $11.2 million for the station in Sydney.
“To be fair it’s been fairly widely reported these numbers over a long period of time. It wasn’t the first time. It’s nothing personal.”