Fairfax sells Trade Me to cut debt

Fairfax is selling its remaining 51 per cent stake in New Zealand online classifieds site Trade Me for over $600 million.

The struggling media company is selling its shares for $3.05 each, in a sale underwritten by UBS that will raise a total of $616 million.

Fairfax says that money will be used to pay down its large debt burden.

The company's chief executive Greg Hywood says cutting debt will allow the business greater flexibility in adapting to the new media environment.

"The proceeds from the sale 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," he noted in a statement.

After the sale, Fairfax will no longer have any stake in Trade Me.

However, Mr Hywood says the firm has learnt some valuable lessons about the online environment through its six-year ownership of Trade Me.

"Trade Me has been a great business for Fairfax and we have learned a great deal more about the successful operation of digital businesses over the years since we acquired Trade Me for $NZ750 million in 2006." Fairfax shares had risen 0.5 cents to 51.5 cents by 10:35am (AEDT).

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