In filings with Bursa Malaysia, Media Prima Bhd and HLI said the board of their associated company MNI had on Tuesday appointed Lim San Peen of PricewaterhouseCoopers Advisory Services Sdn Bhd as the interim liquidator.
MNI, incorporated on Aug 4, 1976, is an indirect associate of Media Prima by virtue of NSTP’s 21.36% direct equity interest. HLI, meanwhile, has a 33.65% interest.
“The board of MNI was of the opinion that MNI could not continue its business. MNI had been operating under very difficult market conditions, especially declining newsprint demand, and has incurred losses for the past three years,” Media Prima and HLI said in separate announcements.
Arising from the creditors’ voluntary winding-up, Media Prima will make a full impairment of RM142.4mil which is the group’s carrying amount of investment in MNI as at June 30.
The HLI group will make a full impairment provision of RM171.5mil, representing its carried amount of investment as at the same date.
Both Media Prima and HLI said the provisions would have an adverse impact on their financial quarter ended June 30, 2017.
They said that apart from the one-off impairment, the liquidation of MNI would not have any other adverse impact on their respective group, and going forward, their group would no longer have to equity account the results of MNI.
MNI, which operates a newsprint mill in Mentakab, Pahang, signed an 11½-year, US$287mil (RM1.2bil) project financing deal in 1998 for the construction of the country’s first newsprint mill.
Oslo-based Norske Skog, one of the world’s largest producers of publication paper, owns the same level of stake in MNI as HLI, at 33.65%, while the Rimbunan Hijau group owns the remaining 11.34%.