Australia's Fairfax to sell stake in New Zealand's Trade Me

Struggling Australian media giant Fairfax said Monday it is selling its remaining 51 percent stake in New Zealand's largest online auction site Trade Me for Aus$616 million ($650 million). Fairfax, which owns newspaper mastheads such as The Age in Melbourne, the Sydney Morning Herald and Wellington's Dominion Post, said it would use proceeds from the sale to pay down debt. "(It) will reduce Fairfax's net debt and will provide us with a very strong balance sheet and the financial flexibility to invest and to complete the company's structural transformation," chief executive Greg Hywood said. Fairfax bought Trade Me for NZ$750 million ($635 million) in 2006 and has already made NZ$534 million selling off 49 percent of the company in two separate tranches in December 2011 and June this year. Founded in 1999, it is New Zealand's largest auction site, with 2.5 million registered users in a country with a population of just 4.4 million, eclipsing rivals such as eBay. It has been a strong performer for Fairfax, which announced a massive Aus$2.73 billion net annual loss in August amid plunging newspaper revenues and circulation. Fairfax has previously announced it will slash 1,900 jobs and erect paywalls on its flagship titles as it seeks to restore the company's fortunes in the digital age. The Sydney Morning Herald and The Age in Melbourne will also shift from broadsheet format to a more compact, tabloid size and two printing facilities will be shut. Hywood said Fairfax had "learned a great deal more about the successful operation of digital businesses" since acquiring Trade Me. "Trade Me's strong performance has given rise to an opportunity now to reduce debt and provide greater financial flexibility," he said. "We have every confidence in Trade Me's ongoing strength and wish it every success in the future." Trade Me shares were placed in a trading halt on the New Zealand stock exchange ahead of the announcement.