Utusan Melayu (Malaysia) Bhd faces possible de-listing from Bursa Malaysia amid financial distress coupled with failure to find a white knight.
The news comes after talks that the oldest Malay daily that was established in 1939 as Utusan Melayu with its first publication in Jawi would cease operations this Wednesday after operating for 80 years.
As at June 30, 2019, its accumulated losses stand at RM261.61 million.
In a filing to Bursa Malaysia today, it said that based on the current performance of its publishing, distribution and advertising segment, the board is unsure that the group would turn around by the end of financial year 2019.
“Due to the above declining results, the group is experiencing a cash flow constraint and has seriously addressed the issue by intensifying its efforts for the disposal of the properties.
“However, the disposal progress is much affected by the slow market sentiment, restriction and requirement by the relevant authorities and thus the company has not been able to resolve the cash flow issues immediately,” it said.
It also said that it is impossible for the group to convince potential investors to revive the business.
“A few potential identified parties have declined to participate due to the group’s huge liabilities,” it said.
Hence, the group would not be able to meet Bursa Malaysia’s requirement to uplift the Practice Note 17 (PN17) status.
In other words, the newspaper group, which once was controlled by Umno, is on the brink of being delisted from the stock exchange.
Umno trimmed its stake in Utusan in February, selling off a 30% equity interest. The opposition party currently holds an 18.16% stake.
Umno’s former Kulim-Bandar Baharu MP Abd Aziz Sheikh Feadzir’s investment vehicle Opulence Asia Sdn Bhd bought the 30% stake from Umno, making him the largest shareholder currently.
Another substantial shareholder is Tan Sri Syed Mokhtar Albukhary, who owns a 19.72% stake in Utusan.
Syed Mokhtar has been in the spotlight of late, after continuously raising his shareholding in Media Prima Bhd. The tycoon, who owns the publisher of The Malaysian Reserve, emerged as Media Prima’s largest shareholder with a 19.5% stake last month.
Utusan, which publishes Utusan Malaysia, Mingguan Malaysia, Kosmo and Kosmo Ahad, has turned in a seventh consecutive quarterly net loss at RM3.89 million for the three-month period ended June 30, 2019 (2QFY19).
Related report: Aug 19, Utusan Can’t AFford to Pay Salaries, Staff Told