A quarter-century later, Utusan bids farewell to Bursa

TheEdge Fri, Aug 30, 2019 10:39am - 1 year ago

KUALA LUMPUR: Utusan Melayu (M) Bhd will be delisted today ahead of Malaysia’s 62nd anniversary of its independence, marking an end to another chapter of the publisher’s once illustrious past.

After a quarter of a century as a listed entity, the board of directors of the news publisher announced to the bourse yesterday that it will not appeal the regulator’s decision to delist its securities, following its failure to regularise its financial position within the stipulated period.

“ ... and pursuant thereto, the securities will be delisted on Aug 30, 2019.”

Listed in August 1994 at an initial public offering price of RM1.50, the formerly Umno-controlled media group that publishes Utusan Malaysia and Kosmo! was once a market darling, rising as high as RM5.62 in 2000, Bloomberg data showed.

But investors can be capricious and in the same year the stock tumbled to around the RM2 level with little respite since.

At its last traded price of 5.5 sen before trading of its securities was suspended on Wednesday, its market capitalisation was a mere RM6.1 million.

But like its once vaunted paper Utusan Melayu — the country’s oldest Malay daily established in 1939 — the entity has been a shadow of itself. In its heyday in the 1990s, the daily boasted substantial readership as it sold 350,000 copies a day.

However, its readership dwindled over the years because of its news slant, and it gradually became more and more reliant on the support of government-linked companies.

On Aug 20, 2018, Utusan announced it had lapsed into Practice Note status after defaulting in principal and profit payments to Maybank Islamic Bhd and Bank Muamalat Malaysia Bhd, totalling RM1.18 million.

Having been in the red since 2012, finding a white knight has not been easy, particularly given its accumulated losses of RM261.6 million and total debts of RM139.19 million as at June 30 against the total carrying value of its properties of RM275 million.

The group turned in a seventh consecutive quarterly net loss of RM3.89 million for the second quarter ended June 30, 2019 (2QFY19). Its quarterly revenue more than halved to RM25.91 million, from RM63.87 million for the year-ago quarter.

In its latest quarterly financial results, it said that it is “impossible for the group to convince potential investors to revive the business” as “a few potential identified parties have declined to participate due to the group’s huge liabilities”.

Employees have not been paid since June because of cash flow issues. It maintained slow market sentiments and regulatory restrictions have also impeded its efforts to sell its properties to raise cash.

Utusan will continue to publish despite its financial difficulties although its newspapers, Utusan Malaysia and Kosmo!, will see price hikes of 50 sen.

Group chief executive officer Datuk Abd Aziz Sheikh Fadzir — formerly the Kulim-Bandar Baharu member of Parliament from Umno — is the media group’s largest shareholder, owning 31.61% via his investment vehicle Opulence Asia Sdn Bhd.

Abd Aziz acquired 35 million shares representing 30% of the total issued and paid-up share capital of the company from Umno on Feb 8, according to the group’s 2018 annual report.

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