What’s sending the Seven West Media (ASX:SWM) share price up 6% on Friday?

The media company is getting its books in order.

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Two people having a meeting using a laptop and tablet to discuss Seven West Media's balance sheet

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The Seven West Media Ltd (ASX: SWM) share price is set to finish the week in positive territory following the company’s latest announcement.

During the early afternoon trade, the media company’s shares are up 6.02% to 44 cents. This means that in the past month, the Seven West Media share price has risen by almost 13%.

What did Seven West Media tell the ASX today?

Judging by today’s gains, investors are pleased with the company’s efforts to improve its balance sheet position.

According to its release, Seven West Media advised it has refinanced its debt facilities into one new facility. This will deliver lower funding costs as well as more flexible terms for the company. The loan’s maturity date has also been extended until October 2024.

The new facility funding costs have been cut in half due to a negotiated rate of 2.25% above BBSY. The terms BBSY is the bank bill swap bid rate, which is the interest rate used for debt financing.

Seven West Media stated that the consolidated facility marks an important milestone in managing its debt profile. This includes reducing the company’s net debt by 57% ($158 million) to $240 million during FY21. The net debt leverage ratio stood at 0.95x.

During August, Seven West Media reported an underlying net profit after tax (NPAT) of $125.5 million.

Originally, the old facility was tied to COVID-era restrictions such as constraints on capital management. However, this has now been erased, giving Seven West Media greater flexibility to pursue growth opportunities.

Seven West Media share price snapshot

The Seven West Media share price has surged by 22% in 2021. If we zoom out a bit, the share price has done even better, accelerating by 160% since this time last year.

Seven West Media has a market capitalisation of $655 million and approximately 1.58 billion shares on its registry.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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