KUALA LUMPUR: Media Prima Bhd, whose traditional revenue segment has been shrinking over the years, may undertake a privatisation exercise as part of its restructuring plan.

Sources said the exercise is one of the options being considered by Tan Sri Syed Mokhtar Albukhary, who indirectly owns a controlling stake in the media giant through Aurora Mulia Sdn Bhd.

Aurora Mulia is the single largest shareholder of Media Prima with a 31.22% equity interest. Its board members include Syed Mokhtar’s son Syed Danial Syed Mokhtar Shah.

“Talk of privatisation has been around since December last year, but it was never finalised. The plan has been put on hold pending the ‘right timing’,” said a source familiar with the matter.

According to another source, it is uncertain if the privatisation exercise will pan out anytime soon, or at all, given that it was mooted before the recent change of government.

This is in view of the fact that two state-controlled funds, the Employees Provident Fund (EPF) and Permodalan Nasional Bhd (PNB), are substantial shareholders of the media conglomerate. The EPF owns an 11.6% equity interest in Media Prima, while PNB holds a 9.75% stake in the media group.

“The EPF and PNB will be ‘asked’ to sell their [Media Prima] shares which is unlikely to happen unless he (Syed Mokhtar) gets the ‘blessing’ from the new administration,” the source said.

Details of the privatisation exercise are limited but shares in Media Prima have been on the decline. At last Friday’s closing price of 17.5 sen, the counter was down 63.54% compared with 48 sen on Sept 11, 2019, when Aurora Mulia raised its stake in Media Prima to 31.2%.

Aurora Mulia had been increasing its stake in Media Prima between July 2 and Sept 11 last year through off-market transactions at a premium price of 60 sen a share. At the time, Media Prima shares were trading between 47 sen and 48.5 sen.

According to the rules on takeovers, mergers and compulsory acquisitions, a mandatory general offer to take the company private will have to be undertaken if Syed Mokhtar further increases Aurora Mulia’s stake in Media Prima by more than 2%.

Other alternative routes for privatisation include the takeover of Media Prima’s assets and liabilities, and using the group’s cash to take it private through selective capital repayment.

Syed Mokhtar, whose net worth is estimated at US$1.3 billion (RM5.42 billion), has been synonymous with taking publicly held companies private whether it be for restructuring or otherwise.

Some of these companies include Aliran Ihsan Resources Bhd, UMLand Bhd, Padiberas Nasional Bhd and most recently Utusan Melayu (Malaysia) Bhd.

On Oct 9, 2019, Utusan Malaysia ceased publication after 80 years, alongside its 15-year-old sister paper, Kosmo!.

This came after Utusan sold 70% in Dilof Sdn Bhd — its subsidiary that holds the permit for the two publications — to Aurora Mulia.

It has been reported that the two Malay dailies will be relaunched later this year and headquartered together with The New Straits Times Press (Malaysia) Bhd (NSTP) in Bangsar.

NSTP, which publishes three national newspapers — Harian Metro, Berita Harian and New Straits Times — is owned by Media Prima.

Besides Utusan, Syed Mokhtar is also believed to wholly-own TMR Media Sdn Bhd, publisher of The Malaysian Reserve, which will also move into the NSTP headquarters, according to industry sources.

The financial newspaper is currently headquartered at Menara 1MK in Mont’Kiara.

“The new Utusan and Malaysian Reserve will start operating from NSTP’s Balai Berita in Bangsar starting April 1,” said one of the sources.

Meanwhile, Media Prima on Feb 28 announced that its group executive director, Datuk Iskandar Mizal Mahmood, has been redesignated as group managing director (MD), effective April 1.

Iskandar, who is said to be linked to Syed Mokhtar, will succeed Datuk Kamal Khalid, whose tenure will end on March 31.

He was roped into Media Prima’s board on Sept 30 last year, along with Mohamad Abdullah who was appointed non-independent and non-executive director. The latter also holds directorships in several private companies within the Albukhary Group, which is controlled by Syed Mokhtar.

It is worth noting that Media Prima has also appointed veteran newsman Firdaus Abdullah as the new MD of Media Prima Television Networks, effective last Monday.

Firdaus has been said to be a loyalist of former prime minister Tun Dr Mahathir Mohamad, with whom Syed Mokhtar is also closely associated. He succeeded Datuk Manja Ismail, who has been transferred to Primeworks Studios, a subsidiary of Media Prima.

Media Prima posted a net loss of RM104.46 million for the fourth quarter ended Dec 31, 2019 versus a net profit of RM79.2 million a year earlier, due mainly to exceptional items in respect of the provision for termination benefits that is part of the restructuring exercise.

Revenue for the quarter rose 4.72% to RM304.62 million from RM290.89 million previously.

For the full financial year, Media Prima posted a net loss of RM177.85 million compared to a net profit of RM58.62 million for the previous year. Revenue fell to RM1.11 billion from RM1.18 billion.

Besides Media Prima, Syed Mokhtar’s other media assets include the concession for digital television transmission (MYTV Broadcasting Sdn Bhd), MPH Bookstores and Percetakan Nasional Malaysia Bhd.