Australian media group Seven West Media, owner of The West Australian newspaper and the Seven Network, on Monday announced it will embark on a A$440 million ($450 million) capital raising to write off debt via a renounceable one-for-two rights issue to existing shareholders.

The share sale would have an offer price of A$1.32 per share, which is heavily discounted by almost 20 per cent compared from its Friday's close at A$1.62. However, this was still a decline of more than 67 per cent down from February's peak of $4.05 per share.

Proceeds from the share sale will be used to repay debt. Hit by an advertising slump, the beleaguered company targets to reduce its net debt from A$1.88 billion to about A$1.44 billion.

Seven West had already placed its shares in a trading halt on the ASX on Monday morning.

Its two largest shareholders, Seven Group Holdings and private equity giant KKR which own Seven West Media at 33.2 per cent and 11.8 per cent, respectively, supported the share sale and agreed to take up their full entitlements under the share issue, the industrial firm said.

Underwriters for the share sale were JPMorgan, UBS, Goldman Sachs and Grant Samuel.

"Seven West Media continues to have the best mix of media assets in Australia and is well placed to maintain its dominant ratings position and capture advertising spend irrespective of future advertising market conditions,'' Chairman Kerry Stokes said in a statement.

"Despite the difficult market conditions facing all Australian media companies, I remain optimistic about the longer-term growth outlook for Seven West Media. The pro-rata offer has been designed to ensure all shareholders are able to participate equally in this growth.''

Last month, Seven West named former Woodside Chief Executive Don Voelte as its new chief executive to replace David Leckie.

Seven West Media said it would pay a fully franked dividend in October of six cents a share, and in April next year another six cent dividend, but said it would suspend its dividend reinvestment plan.

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