KUALA LUMPUR (Aug 21): Utusan Melayu (M) Bhd, the publisher of Utusan Malaysia and Kosmo!, will continue its operations for now. However, the company, which is now valued at only RM7.75 million, remains on the verge of being delisted from the Main Market of Bursa Malaysia after 25 years on the local stock exchange.
Utusan’s shares succumbed to selling pressure yesterday, finishing four sen or 36.36% down at an all-time low of seven sen. A total of 1.38 million shares exchanged hands.
According to Utusan’s web portal, the group’s chief executive officer Datuk Abd Aziz Sheikh Fadzir clarified that the operations will continue despite financial challenges faced.
“It is not true that we are closing down (operations). Yes, we are having some problems, but we have plans to improve our business,” said Abd Aziz, who is the single largest shareholder with a 31.61% stake.
The newspaper group was once controlled by Umno, which owned a 49.77% stake before selling 30% to Abd Aziz’s investment vehicle Opulence Asia Sdn Bhd. Umno now holds an 18.16% stake. Another substantial shareholder is tycoon Tan Sri Syed Mokhtar Albukhary, with 19.72%.
The cash-strapped publisher has also decided to raise the cover price of its newspapers from RM1.50 to RM2 for Utusan Malaysia, and from RM1 to RM1.50 for Kosmo!, starting on Friday.
The ministry of human resources yesterday, through the Social Security Organisation (Sosco), said providing immediate help to Utusan employees in the event of employment loss is a “priority”.
It said Utusan staff who are losing their jobs will get assistance from the Employment Insurance Scheme, which provides financial assistance, as well as help secure new employment.
Utusan had in September last year offered a voluntary separation scheme to over half of its 1,500 workers, as part of its restructuring exercise to reduce overall costs. Employees were seen staging a picket at the company’s headquarters recently over unpaid wages of up to three months.
Trading of the Practice Note 17 company’s shares will be suspended from next Wednesday as the group had failed to submit its regularisation plan to authorities by the Aug 19 deadline. Utusan said that it is “impossible” for the group to find potential investors to revive the business due to its huge liabilities, with total debts of RM139.19 million as at June 30.
Nonetheless, in the event Utusan submits an appeal against the delisting to Bursa Securities on or before Tuesday, the delisting exercise shall be deferred, pending the decision on the appeal.
This article first appeared in The Edge Financial Daily, on Aug 21, 2019.