Owner of the KIIS radio network, ARN Media (ASX: A1N), has agreed to sell its Hong Kong out-of-home advertising business to DFI Retail Group for HK$30.2 million ($5.6 million), marking the final step in the company's strategic exit from offshore operations as it refocuses on its core Australian business.
The sale covers Cody Outdoor International (Hong Kong) Limited and Buspak Advertising (Hong Kong) Limited, collectively known as Cody HK.
Under the terms of the deal, 75 per cent of the purchase price will be payable upfront with the remaining 25 per cent due twelve months after completion, which is expected in the second half of 2026.
Beyond the headline price, the transaction will release about $30.5 million in bank guarantees currently tied to the Cody HK operations with ARN applying net proceeds from the sale to reduce net debt.
“The sale of Cody HK is an important step in simplifying ARN’s portfolio of assets," says Michael Stephenson, the CEO of ARN Media.
"The divestment of this non-core asset further strengthens our balance sheet, allows us to focus on our Australian operations and supports the delivery of our long-term strategic plan.”
The divestment concludes ARN's exit from the Hong Kong out-of-home advertising sector, a process first flagged in 2025 as part of a broader push to shed non-core assets and redirect capital, management time and resources toward its Australian operations.
ARN chairman Hamish McLennan described Cody HK as "the last remaining disposal currently under way" during the company's annual general meeting address in May this year.
ARN has been progressively stripping back its portfolio over the past 18 months, having already completed its exit from creative agency Emotive and partially sold down its shareholding in Southern Cross Media.
The company sees the divestment program as central to its transformation into what it describes as a "digitally driven entertainment business".
The sale comes against the backdrop of a challenging period for ARN's financial performance.
The company's FY25 results, reported in February this year, showed revenue of $285.2 million, down 10 per cent, while underlying EBITDA fell 23 per cent to $47.5 million.
Dividends have been suspended while the non-core asset divestment program proceeds.
ARN has made progress on its cost reduction program, delivering $31 million in savings since FY24 against a $55 million target by FY27.
Net debt was reduced 28 per cent to $64 million over the period, a figure that will be further lowered by the Cody HK sale proceeds and the freeing up of the $30.5 million in bank guarantees.
The company earlier this month also reached a binding $12.09 million settlement with its former radio star Kyle Sandilands, resolving all outstanding legal proceedings between the pair.
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