By TMR / Graphic by MZUKRI
Media Prima Bhd via its unit Big Event Sdn Bhd had entered into a conditional sale and purchase agreement with PNB Development Sdn. Berhad to repurchase Balai Berita in Bangsar for cash consideration of RM156.4 mil.
Big Events is a wholly-owned subsidiary of Sistem Televisyen Malaysia Berhad which in turn is a wholly-owned subsidiary of MPB.
In a filming to Bursa Malaysia yesterday the media group said the buy back of the 151,814 sq ft office building will be satisfied entirely by cash.
In 2018, MPB sold the land to PNB for RM280 mil due to the capital requirements of its operations and financial obligations.
Given the financial position and cash flow requirements of the Group at that juncture, the sale enabled the Group to raise the required funds for the repayment of its term loan to reduce its gearing and to allocate funds for its operations.
MPB has undertaken a transformation exercise since the first quarter of 2020 which
includes revising its revenue models and implementing cost optimisation initiatives. These initiatives have strengthened the foundation of the Group and resulted in a turnaround of its financial performance with a profit being recorded for four consecutive financial quarters since the financial period ended 30 September 2020.
“The Group believes that it is well placed to take advantage of the opportunity it now has to acquire the Property as part of its initiatives to further grow its media segment.
The Property currently houses the Company’s corporate headquarters and offices for its subsidiaries,” said MPB in the bourse filing.
MPB added that it intends to invest in new studios to cater for growing content
production requirements and consolidate MPB’s news gathering operations.
“The proposed acquisition will crucially provide the Group with long term security for its operations to remain at Balai Berita for the foreseeable future, in particular beyond the expiry of the 1st Extension Period (31 December, 2024),” added MPB.
The proposed acquisition will also mitigate the risk of an increase in rental rates and the loss of right of use of the property, the group noted.