Saudi Arabia acquires 5.7% stake in Live Nation

Saudi Arabia acquires 5.7% stake in Live Nation

Saudi Arabia's Public Investment Fund has taken a 5.7% stake in Live Nation.

According to a filing with the US Securities And Exchange Commission, the kingdom's sovereign wealth fund has acquired 12,337,569 shares valued at just under $500 million (£396.4m), making it the entertainment giant's third-largest shareholder.

Shares in the promoter were up more than 3.75% to $42.01 after the announcement. Its share price had halved in the wake of the coronavirus crisis after reaching an all-time high of $76.08 on February 21. 

Live Nation recently announced that CEO Michael Rapino was giving up his $3m (£2.4m) salary as part of cost-cutting moves in response to the pandemic. Other senior executives at Live Nation have seen their salaries reduced by up to 50%. The reductions in salary will last until circumstances “warrant restoring compensation to contractual levels”, according to an SEC filing.

“Given the uncertainty associated with the duration of current conditions globally, the company has launched a number of initiatives to reduce fixed costs and conserve cash,” said the company. 

The firm revealed that 8,000 shows have been affected by the lockdown, of which 7,000 were postponed and the remainder cancelled. For those events, 15m tickets were sold. Refunds have been issued on the 1.6m tickets sold for events that have been cancelled. Live Nation expects to allow some refunds for postponed shows when new dates are confirmed.

The parent company of Ticketmaster, Live Nation has created the Ticket Refund Plan for shows cancelled or rescheduled in the US or Canada, following criticism of its previous refund policy.

Earlier this month, Live Nation announced an amendment to its existing credit agreement, establishing a new incremental revolving credit facility of $120m.

“The live entertainment industry has delivered incredible global growth for over 20 years, which speaks to the great passion and resilience of fan demand,” said Rapino. “With this additional liquidity, the flexibility in our debt covenants, and cost-cutting efforts, we believe that Live Nation has the financial strength to weather this difficult time. We will be ready to ramp back up quickly and once again connect audiences to artists at the concerts they are looking forward to.”

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