SINGAPORE • Singapore Press Holdings Ltd, which publishes the country’s flagship daily newspaper, plans to spin off its media business into a non-profit entity after conducting a strategic review of its businesses.
Faced with a steadfast decline in the media business, Singapore Press — which also invests in properties from shopping malls to student accommodation — has approached the government with a proposal to put the unit on a sustainable financial footing, it said in a statement yesterday.
The government has indicated its support for the restructuring, it said. “Singapore Press shareholders are not likely to tolerate the continued negative impact that the media business has on the company’s financial prospects,” company chairman Lee Boon Yang said at a briefing.
“On the other hand, we cannot allow a functioning, trusted and respected media organisation to be whittled down over time by market pressure and commercial constraints.”
The company will provide initial resources and funding worth at least S$110 million (RM337.84 million) to a new unit, which will eventually be transferred to a nonprofit entity.
This structure that allows the media business to “seek funding from a range of public and private sources with a shared interest in supporting quality journalism and credible information is the optimal solution,” the company said in a statement.
The publisher of The Straits Times and The Business Times added that winding up or selling the business were not feasible options given the function of providing news and information to the public.
Last year, the conglomerate swung to its first full-year loss on record, based on data compiled by Bloomberg going back to 1990, after consecutive years of shrinking net income.
Its media business accounted for more than half of its revenue last year, while property made up about 38%, according to data compiled by Bloomberg.
Singapore Press said while such a model may be unfamiliar in the country, many news organisations overseas are operating under these funding structures. These include the Guardian in the UK that’s been controlled by the Scott Trust since 1936 and the Tampa Bay Times in the US that’s owned by the non-profit Poynter Institute, it said.
Singapore Press’ shares were halted for trading yesterday pending release of the announcement.
They have gained 17% since the end of March, set for their third straight quarter of gains.
Shares rose to their highest in more than a year in April, before paring some of those gains, after the company said in March that it is undertaking a strategic review to consider options for its various businesses.
During the briefing, CEO Ng Yat Chung said the review of its remaining businesses continues. Credit Suisse Group AG is financial advisor to Singapore Press, while Evercore Asia (Singapore) Pte Ltd has been appointed to advise the company’s board of directors. — Bloomberg