James Murdoch saves Art Basel?
There is a fire at the lake. ( common expression in Europe: There is no fire on the lake, meaning it is not urgent )
After enormous losses in 2018 due to significant asset impairments ( $ 191 M ) and substantial losses in 2019 (almost $ 10 M of $ 474 M), Swiss company MCH Group, which owns the Art Basel fair, is severely shaken by the Covid-19 crisis.
Bernd Stadlwieser, the managing director of MCH, predicts a drop in turnover between 138 and 190 M US$ in 2020, resulting in losses of several tens of millions of dollars. MCH, which organizes or hosts numerous fairs, has to face the economic consequences of the cancellation of these events, starting with its jewels that are Art Basel, Art Basel Hongkong, and perhaps Art Basel Miami.
The group urgently needs to find fresh money. He will, therefore, propose on August 3 at an extraordinary general meeting of shareholders, a capital increase of $ 110M: $ 32 M in the form of conversion into local government loan shares and $ 78 M in cash.
James Murdoch's company Lupa Systems will be able to subscribe to all or part of this increase (depending on what small shareholders do), which ensures that it owns at least 30% of the MCH Group and up to 44%. In other words, he becomes the reference shareholder.
James Murdoch is the youngest son of Rupert Murdoch, the media tycoon who notably owns in the United States, the very conservative Fox News. With the proceeds from the sale of the 21st Century Fox, in 2019, he set up an investment fund in the cultural industries and the media.
Likely, the Covid-19 crisis will also affect other trade show organizers. Thus Frieze has just announced the cancellation of its editions planned for next October in London.
A figure says well the descent into a hell of MCH: in December 2017, the action was worth $ 88.5 while the subscription offer for the capital increase is $ 11.18.
Le journal des Arts