OSLO, Dec 1 (Reuters) – Viaplay (VPLAYb.ST) shares tumbled by as much as 82% on Friday as the struggling Swedish streaming group said it would raise new equity and restructure its debt in a rescue plan that would sharply dilute the holdings of existing owners.

Under pressure to stabilise its business as rising living costs dent consumer demand, Viaplay in June replaced its CEO and has repeatedly warned of a weakening business environment that has sent its shares plunging.

The company said layoffs had exceeded the 25% indicated earlier this year.

“We unfortunately had to (let) go of more than 30% of our workforce,” Chief Executive Jorgen Madsen Lindemann told Reuters.

Viaplay in a statement said it aimed to raise 4 billion Swedish crowns ($380 million) in new equity, write down 2 billion crowns in debt and renegotiate the terms of debt totalling 14.6 billion crowns.

“This extensive package and operational measures are absolutely necessary to secure the survival of the company, and this marks a new beginning for Viaplay Group,” board Chair Simon Duffy said.

The recapitalisation was “the best available solution to enable rebuilding of a healthy financial position”, Lindemann told analysts.

Viaplay’s shares traded down 79% at 4.9 crowns at 0813 GMT, taking the year-to-date drop to 98%. The group has lost some 41 billion Swedish crowns ($3.9 billion) in value since the stock’s all-time high in October 2021.

The company plans to issue 4 billion new shares at a price of 1 Swedish crown each, a 96% discount to Thursday’s closing price of 23.68 crowns on the Stockholm bourse.

New shares worth 3.1 billion crowns will be sold to specific investors via a directed issue and the remaining 0.9 billion crowns will come from a rights issue, the company added.

The plan was backed by key shareholders including Canal+ and PPF, while funds managed by Nordea Asset Management planned to take part in the share issue and keep their joint stake of 7.7%, Viaplay said.

The plan, which will be voted on by shareholders, also requires the support and approval of debt providers and bondholders.

Viaplay’s Chief Financial Officer Enrique Patrickson told analysts in a call the company was in discussions with certain larger holders of three outstanding bonds.

The group also reported an operating loss for the third quarter of 538 million crowns, taking its nine-month loss to 7.4 billion crowns.

Viaplay in July announced layoffs and said it would focus on its core Nordic, Dutch and Viaplay Select operations, while downsizing, partnering in, or leaving other markets.

On Thursday the company said it had sold a British business.

In a conference call, Patrickson said the Baltic and Polish operations will be run until summer 2025, and then will be closed down.

($1 = 10.4714 Swedish crowns)

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