Utusan heads for delisting, but printing goes on

by MARK RAO/ pic by RAZAK GHAZALI

UTUSAN Melayu (M) Bhd’s share price plummeted almost 37% yesterday and could be removed from the local bourse at the end of the month as financial woes, high debts and operation turmoil weigh on the 80-year-old newspaper company.

The company, which is also embroiled in a management-employees industrial battle over unpaid salaries, was reported to pull the shutter on the printing of its newspapers.

However, the management yesterday announced that the company will continue to print Utusan Malaysia and its sister publication Kosmo!, but the cover prices will be increased by 50 sen effective Friday. The oldest Malay newspaper two days ago announced a net loss of RM3.89 million for the second quarter ended June 30, 2019, compared to a net profit of RM18.85 million a year ago.

Investors, however, were spooked after the company said it could not “convince potential investors to revive the business” as the few potential identified parties had declined to participate due to the group’s huge liabilities.

It also said it was unable to meet the requirement of the regularisation plans after being classified as PN17 on Aug 20, 2018.

The bad news saw investors dumping the share in the formerly Umno-owned newspaper, pushing the share price 36.36% lower to close at seven sen and valuing the company at only RM7.75 million.

The company yesterday said it has received a letter from Bursa Malaysia Securities Bhd in relation to the suspension and delisting of its shares.

Bursa had noted Utusan’s failure to submit its regularisation plan to the Securities Commission Malaysia or Bursa for approval within the stipulated time frame.

Utusan said the company has been informed that the trading of its securities will be suspended effective Aug 28, 2019, and the securities will be delisted on Aug 30, 2019, unless an appeal against the delisting is submitted to Bursa on or before Aug 27, 2019.

“Any appeal submitted after the Appeal Timeframe will not be considered by Bursa.”

The media group registered consecutive full-year net losses from financial year 2012 (FY12) to FY18, amounting to total losses of RM394.95 million over the seven years. Its net loss came in at RM184.09 million in FY18.

Utusan was among the victims of the industry-wide declines in the circulation of print-based newspapers and the associated advertising business.

The company’s move to digital platforms, meanwhile, failed to generate sufficient income to compensate for the fall in revenue previously generated by traditional print platforms.

Utusan slipped into PN17 status in August last year after defaulting on RM1.18 million in repayments owed to two banks — Bank Muamalat Malaysia Bhd and Maybank Islamic Bhd.

Utusan initiated its voluntary separation scheme in December last year as part of its rationalisation efforts, resulting in 700 employees being retrenched. This reduced the company’s staff to 835 employees.

On Monday, close to 100 current and ex-staff had staged a protest outside the newspaper’s office over unpaid salaries.

Utusan Malaysia was first published as Utusan Melayu in Jawi back in 1939 in Singapore, and was founded by Yusof Ishak, who later became the first president of Singapore, and Abdul Rahim Kajai, the “Father of Malay Journalism”.

The newspaper was aligned to Umno which was its major shareholders at one point, but following Barisan Nasional’s defeat in the 14th General Election, revenue taps began to dry, adding to the company’s financial woes.