by SHAZNI ONG/ pic by ARIF KARTONO
UTUSAN Melayu (M) Bhd is set to relinquish its 70% stake in its subsidiary, Dilof Sdn Bhd, to Aurora Mulia Sdn Bhd.
Utusan said Dilof currently holds permits for the publication of two Malay language newspapers — Utusan Malaysia and Kosmo!.
The relinquishment exercise was to ensure the continuity of the publication of the two mainstream newspapers, Utusan said in a statement yesterday.
“This is to ensure the 80-year-old Utusan Malaysia and the 15-year-old Kosmo! newspapers can continue.
Utusan is currently facing a cashflow problem and the investment in Dilof will enable the financial support from Aurora Mulia and thus ensure the continuity of both newspaper publications,” it said.
The statement added that Aurora Mulia was chosen because it has become a major shareholder of Media Prima Bhd.
Utusan said the investment will also see the consolidation of departments for the publication of several major newspaper brands in the country and activities such as printing, distribution and advertising.
The statement did not disclose the amount Aurora Mulia is acquiring Dilof for.
This deal comes weeks after Aurora Mulia emerged as controlling shareholder in Media Prima at 31.2% for an estimated RM207 million or 60 sen a share.
Last week, Media Prima announced the appointments of former Pos Malaysia Bhd group CEO Datuk Iskandar Mizal Mahmood and former Pharmaniaga Bhd MD Mohamad Abdullah as board members effective immediately.
Dilof is a company owned by Utusan chairman Datuk Abdul Aziz Sheikh Fadzir and was founded on Aug 23, 2018, before being acquired by Utusan on Aug 26 this year.
According to Utusan’s previous exchange filing, Dilof’s principal activity is the business of advertisement and communication in digital media or in any other media, including telecommunication solutions, wireless, data, electronic article surveillance, GPS, video and audio.
Utusan also acquired Utusan Digital Sdn Bhd as its subsidiary. The two companies were bought four days before Utusan was released from the listing on Bursa Malaysia.
Utusan ceased to be a publicly-traded company in August after it chose not to file an appeal against the suspension and subsequent delisting of its shares from the local bourse after listing on the Kuala Lumpur Stock Exchange in 1994.
The delisting comes after the loss-making media group failed to regularise its financial condition more than a year after slipping into the Practice Note 17 (PN17) status after defaulting on loans from two local lenders.
The company raked up RM12.09 million in net losses for the first half of its fiscal year ending Dec 31, 2019 (FY19).
It failed to woo new investors to revive the business due to its liabilities, estimated at RM393.46 million. The company’s assets are valued at RM293.15 million.
The company initiated a voluntary separation scheme in December last year, slashing 700 positions. The exercise reduced its staff to 835 employees. Property disposals and equity divestments were undertaken to raise cash as well.