KUALA LUMPUR: Shareholders of Media Prima Bhd have voted in favour of the media group’s plans for the sale and leaseback of its properties in Shah Alam and Bangsar.
The group said the 99.8% of the votes, cast during an EGM yesterday, had been in support of the resolution.
In August, Media Prima announced the proposed sale of its New Straits Times Press (M) Bhd’s (NSTP) Balai Berita in Bangsar and the land where its printing plant is located in Shah Alam to PNB Development Sdn Bhd for RM280mil.
It also announced the tenancy agreements for the properties, as a condition under the sale purchase agreement, which will enable Media Prima to continue to operate its headquarters in Bangsar and its printing plant in Shah Alam without disruption for a minimum period of six years.
Upon completion of the sale, by the end of the year, the group will realise an estimated gain of RM127.7mil.
“Media Prima will continue to operate from both locations as stipulated under the agreement,” the group said in a statement yesterday.
It said the utilisation of the proceeds from the sale – for the repayment of term loan – would allow the group to conserve its existing cash reserves for its business transformation plan.
With the full repayment of the term loan, the group said it would be able to save RM22mil on interest expenses as well as reduce its gearing level.
“Moving forward, Media Prima will continue to focus its efforts on generating more revenue through digital and commerce expansions,” it added.
Revenue from Media Prima’s digital and commerce segment increased by 79% for the nine-month period ended Sept 30, 2018, compared with the same period a year ago.
Prior to the passing of the resolution, there had been speculation about whether shareholders would vote for the deals, given that the assets were being sold at an aggregate discount of 8.35% from the market value of RM305.50mil.
The Bangsar property is being sold at a 9.37% discount, the Shah Alam property at a 2.37% discount and the Shah Alam land at a 23.26% discount.
According to the circular to shareholders dated Nov 2, 2018, several parties had expressed interest for the properties but only two conditional written offers were received – one for the Bangsar Property and one for the Shah Alam property and Shah Alam vacant land.
The media company had noted, however, that both conditional written offers were less attractive than the offer made by PNB Development.
“Upon our evaluation of the written offers received, we concluded that PNB Development’s offer was the most suitable offer in terms of pricing and other material terms (including the sale of the sale properties as a package, as opposed to the disposal of individual sale properties),” the circular read.
The group had also cited “lower completion risk” as its reason to sell the assets as a package instead of disposing it individually.
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