KUALA LUMPUR (Sept 21): The Umno-controlled media group Utusan Melayu (Malaysia) Bhd is offering a voluntary separation scheme (VSS) to more than half of its 1,500 workers as part of its restructuring exercise to reduce overall costs due to the company's financial constraints, according to sources.
theedgemarkets.com has learned that the decision came following a closed-door briefing held between the group's executive chairman Datuk Abd Aziz Sheikh Fadzir and its staff this morning at its headquarters in Jalan Utusan, Off Jalan Chan Sow Lin, here.
"The workers will be let off (in stages). About 800 staff (members) at Utusan have received the letters and they have the option to either accept it or not," said one of the sources with direct knowledge of the matter.
Speaking on condition of anonymity, the person said the details on the offer in terms of the duration period and payment structure to the staff are yet to be known at the moment.
"The offer started today but I'm not sure on the details as until when will they (Utusan Melayu) offer this VSS and how much will Utusan Melayu pay," the person said.
This measure will also apply to the group's four key newspapers, Utusan Malaysia, Mingguan Malaysia, Kosmo! and Kosmo! Ahad, as well as its top four magazines, namely Mastika, Saji, Infiniti and Wanita.
At the time of writing, there is no official statement from the company on the matter.
According to its Annual Report, the Practice Note 17 (PN17) company's total liabilities stood at RM328.17 million as at Dec 31, 2017, as compared to RM302.2 million in the previous year.
Utusan Melayu was classified as a PN17 company on Aug 21, as it had failed to provide a solvency declaration to Bursa Malaysia after defaulting on its principal and profit payment to Maybank Islamic Bhd and Bank Muamalat Malaysia Bhd.
On Aug 30, Utusan Melayu said it will have the Corporate Debt Restructuring Committee (CDRC), under the purview of Bank Negara Malaysia, mediate between the group and its respective financiers.
Recently, it was reported that the journalists and photographers of Utusan Melayu were ready to stage a picket on being told that the company had run out of money.
Citing a source, The Malaysian Insight reported on Sept 18 that more than 100 journalists and photographers were ready to picket.
It said the owner of the Malay daily, Utusan Melayu, has delayed salaries since last month.
On June 6, the Star, citing Datuk Mohd Noordin Abbas, who was then the group managing director, said the measure would help Utusan Melayu to "rebuild from scratch" and therefore must be seriously considered as part of the company's future.
"I feel Utusan Melayu cannot escape the reality, which is the fact that a VSS must be conducted, as well as an overall cost-cutting measure.
"This is to prevent future situations where the company suffers losses amounting to millions each month," he said during the company's annual general meeting then.
Utusan Melayu shares fell 17.65% or 3 sen to 14 sen with 16,000 shares traded this morning.