MEDIA PRIMA BERHAD ("MPB" OR THE "COMPANY")

RECURRENT RELATED PARTY TRANSACTIONS

1. INTRODUCTION

Pursuant to Paragraph 10.09 (1)(a)(ii) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors of MPB wishes to announce that the Company’s wholly-owned subsidiary, Sistem Televisyen Malaysia Berhad and its subsidiaries (“STMB Group”) has entered into recurrent related party transactions (RRPT) with a related party, MYTV Broadcasting Sdn Bhd (“MYTV”) for the digital terrestrial television (“DTT”) services which includes television transmission and broadcasting services through MYTV distribution network since 1 November 2019. The aggregated transaction value up till 12 March 2020 of RM6.97 million has exceeded 1% of the Net Assets of MPB Group for the financial year ended 31 December 2019.

2. RATIONALE FOR THE RRPT 

The RRPT is necessary for the day to day operations of the STMB Group. The principal activities of STMB Group are commercial television broadcasting and video-on-demand services and it operates four free-to-air television stations (TV3, TV9, ntv7 and 8TV). The National Broadcasting Digitalisation Project by the Government of Malaysia involves the digitisation of television broadcast, known as Digital Terrestrial Television (DTT). This Government initiative is spearheaded by the Ministry of Communications and Multimedia Malaysia (KKMM) and monitored by the Malaysian Communications and Multimedia Commission (MCMC), aimed towards a transition from analogue to digital broadcasting on terrestrial platform for free-to-air television stations. MYTV was appointed by MCMC through a tender process to build, operate and manage the DTT service infrastructure. In view of the Government's initiative to digitise all free-to-air television transmission, the procurement of MYTV's services was necessary to ensure compliance with the national agenda and to ensure the availability of STMB Group's free-to-air television stations. 

MYTV is an indirect wholly-owned subsidiary of Restu Jernih Sdn Bhd a company in which 99.9% is owned by Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor (“TSSM”), who is also a major shareholder of the Company. The nature of relationship of MYTV with STMB is shown in Appendix A attached.

The above RRPT have been carried out on arm’s length basis and on normal commercial terms which are not more favourable to the related party.

3. EFFECTS OF THE RRPT

The effects of the RRPT are as set out below:-

(a) Share Capital and Substantial Shareholdings

The RRPT will not have any effect on the issued and paid-up share capital of MPB or the shareholdings of MPB’s substantial shareholders as it does not involve any issue of shares of the Company.

(b) Earnings, Net Assets and Gearing

The RRPT is not expected to have any material effect on the earnings and net assets of MPB Group for the financial year ending 31 December 2020. There will also not be any material effect on the gearing of the MPB Group.

4. APPROVALS REQUIRED

The RRPT does not require the approval of the shareholders of the Company.  However, as the MPB Group may be entering into other recurrent transactions with persons connected to TSSM (“Other RRPTs”), the aggregate of the RRPT and the Other RRPTs is expected to exceed 5% of the Net Assets of MPB Group (based on audited financial statement for the financial year ended 31 December 2019)  As such,  a mandate from the shareholders for the RRPT and Other RRPTs (“Proposed New Shareholders’ Mandate”) will be sought from the Company’s shareholders at the forthcoming Annual General Meeting of the Company to be convened.

5. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEM
 

Save as disclosed below, none of the Directors, major shareholders and/or persons connected with them, have any interest, direct or indirect, in the RRPT and Proposed New Shareholders’ Mandate, save and except for the following :-

(a) Aurora Mulia Sdn Bhd (“Aurora Mulia”), a Major Shareholder of the Company with direct shareholding in MPB.

(b) Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor (“TSSM”), a Major Shareholder of the Company with indirect shareholding in MPB.

(c) Restu Jernih Sdn Bhd (RJSB), Perspective Lane (M) Sdn Bhd (PLSB) and Sutera Bakti Sdn Bhd (SBSB) are Major Shareholders of the Company with indirect shareholding in MPB.

(d) Dato’ Iskandar Mizal bin Mahmood (“DIMM”), the Group Executive Director of the Company and Mohamad bin Abdullah (“MA”), a Non-Independent Non-Executive Director of the Company, are representatives of TSSM on the Board of MPB. DIMM and MA are collectively referred to as “Interested Directors”.

(e) Michael Gilbert Chan Hong Beng, the Executive   Director/Chief Executive Officer of Media Prima Omnia Sdn Bhd (formerly known as Able Communications Sdn Bhd) a wholly-owned subsidiary of the Company, is a Director of MYTV and was the former Chief Executive Officer of MYTV.

The Interested Directors, have abstained and will continue to abstain from Board deliberations and voting on RRPT and the relevant resolution pertaining to the Proposed New Shareholders’ Mandate at the Board Meetings and will abstain from deliberation and voting in respect of their direct and/or indirect shareholdings on the resolution pertaining to the Proposed New Shareholders’ Mandate at the forthcoming AGM.  The interested Major Shareholders, namely Aurora Mulia, TSSM, RJSB, PLSB and SBSB will abstain from voting on the resolution approving the Proposed New Shareholders’ Mandate at the forthcoming AGM of the Company in respect of their direct and/or indirect shareholdings, if any.

The Interested Directors and/or interested Major Shareholders named above have undertaken that they will ensure that the Persons Connected with them will abstain from voting on the resolution approving the Proposed New Shareholders’ Mandate at the forthcoming AGM of the Company in respect of their direct and/or indirect shareholdings, if any.

The Interested Directors do not hold any MPB Shares as at 4 March 2020. The shareholdings of the interested Major Shareholders in the Company as at 4 March 2020 are as follows:-

(1) Deemed interested by virtue of its interest in Aurora Mulia pursuant to Section 8 of the Companies Act 2016 (“the Act”).

(2) Deemed interested by virtue of its interest in Sutera Bakti Sdn Bhd pursuant to Section 8 of the Act.

(3) Deemed interested by virtue of its interest in Perspective Lane (M) Sdn Bhd pursuant to Section 8 of the Act.

(4) Deemed interested by virtue of his interest in Restu Jernih Sdn Bhd pursuant to Section 8 of the Act.

6. STATEMENT BY AUDIT COMMITTEE AND THE BOARD OF DIRECTORS

The Audit Committee and the Board of Directors, save and except for the Interested Directors, having considered the nature and rationale for the RRPT, were of the view that the RRPT is in the best interest of the MPB Group, fair, reasonable and on normal commercial terms and not detrimental to the interests of the minority shareholders.

This announcement is dated 12 March 2020.