Media Prima buys ntv7 for RM90mil

MEDIA Prima Bhd has agreed to buy Natseven TV Sdn Bhd, which owns and operates rival TV station ntv7, for RM90mil after helping the company deal with its debts. 

Natseven, which will see its debt ring fenced, has net debt of RM145mil. Half the debt will be paid by the end of this year. The balance will be settled in three years, beginning in 2006. 

The acquisition of ntv7 would see Media Prima control four free-to-air (FTA) TV stations in the country and catapult the company to the lead position in terms of viewers of the TV segment, including pay TV, where it will have a 48% share. Its share of advertising expenditure in the FTA segment will swell to 83%. 

Apart from TV3, 8TV and ntv7, Media Prima is set to launch Channel 9 during the first quarter of next year. 

“It is also the intention of Media Prima to manage and keep the brand of each TV network under its stable separate,'' Media Prima group managing director and CEO Abdul Rahman Ahmad said at a press conference in Kuala Lumpur yesterday. 

Natseven has seen its revenue and profits slide over the past few years. The unaudited net loss for the six months to end-July was RM21.1mil and Rahman said ntv7 was forecast to generate revenue of RM90mil this year. 

Media Prima chairman Datuk Abdul Mutalib Mohamed Razak (left) and Abdul Rahman Ahmad.

But Rahman said ntv7, with revenue ranging between RM100mil and RM120mil, will see its ebitda (earnings before income tax, depreciation and amortisation) profit swing into the black and contribute profits to Media Prima. 

Apart from giving Media Prima a big share of viewers and advertising revenue, ntv7 can help Media Prima face the challenges of price discounting in TV advertisements. 

Discounts given for TV ads are about 50%, the highest among media segments that include the radio and newspapers. 

Rahman said Media Prima was targeting to save about RM15mil per year with ntv7, and the savings could be reinvested in improving the local content of its shows. 

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