Michael Hannan, along with the Lindsay Hannan Family Trust have bought $10m worth of Ovato shares, following the settlement of an Entitlement Offer to existing shareholders which was underwritten by the family.

Ovato has also revised its FY19 EBITDA guidance, down to $30m-$33m from $37m-$40m.

Citing industry headwinds, Ovato expects revenues in its Print Australia division to be down 12 per cent from FY2018 following the second half of the 2019 financial year. It points to masthead closures, a shift to cold-set printing, increased competition in publishing,  and softer retail conditions associated with the NSW and Federal elections.

Ovato says it will use the funds to strengthen its balance sheet, and accelerate its NSW site consolidation project.

The Entitlement Offer was first announced in May, with existing shareholders offered one new share at 7c for every 2.3 shares they held.

The Entitlement Offer is split into two parts, totalling $15.5m of new shares. The Institutional Entitlement Offer, which closed on May 21, included $11m worth of shares, of which $10.7m were bought up by the Hannan family.

Prior to the purchase, the Hannan family held a 40.63 per cent stake in Ovato.

There is potential for more shares to be acquired by the Hannans as the retail portion of the offer closes tomorrow, with $4.5m shares still available.

Ovato says the $15.5m raised in the offer will be used in its NSW site consolidation, which it expects to deliver $24m in savings by FY2021.

It also will reduce its debt to $42m-$46m from the previous guidance of $45m-$50m.

Following the increase in ownership by the Hannan family, investor Fraser & Leave (F&N) has seen its voting power fall from 7.8 per cent to 5.8 per cent.

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