Thursday 28 Mar 2024
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KUALA LUMPUR (May 4): Hong Leong Industries Bhd (HLI) and Media Prima Bhd are selling their respective stake of 33.65% and 21.36% in paper manufacturer Malaysian Newsprint Industries Sdn Bhd (MNI) to Asia Honour (Hong Kong) Ltd.

MNI, incorporated on Aug 4, 1976, is an indirect associate of Media Prima by virtue of The New Straits Times Press (Malaysia) Bhd's (NSTP) 21.36% direct equity interest.

In separate filings with Bursa Malaysia today, HLI and Media Prima said they have entered into a shares sale agreement (SSA) on May 2 to sell their entire interests in MNI to Asia Honour Hong Kong with the consent of the liquidator — Lim San Peen of PricewaterhouseCoopers Advisory Services Sdn Bhd.

Under the SSA, HLI and Media Prima will dispose of their stake in MNI for RM22.3 million and RM14.15 million respectively, as well as their stake in redeemable preference shares of MNI for RM338 million after deducting all debts and liquidation costs.

HLI said it is expected to receive the full sale consideration by the first quarter of its next financial year ending June 30, 2019 (FY19), adding that the proposed disposal will enable the group to write back part of its investment in MNI which has been fully written down.

As for Media Prima, it expects to receive the full sale consideration within the third quarter of its financial year ending Dec 31, 2018 (FY18).

"The proposed disposal will enable Media Prima Group to recoup part of its investment in MNI, which had been fully written down in FY17," it added.

In August last year, both HLI and Media Prima had announced that their associated company MNI had initiated creditors' voluntary winding up proceedings as MNI's board was of the opinion that the company 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," they had said.

MNI was also the largest supplier for Media Chinese International Ltd, which owns Ming Pao, Sin Chew Daily, and Nanyang Siang Pau, among others.

HLI shares closed down 2 sen or 0.18% at RM11.18 today, with 106,100 shares done, bringing a market capitalisation of RM3.58 billion. Media Prima's share price ended the day unchanged at 32.5 sen, with 3.86 million shares traded, valuing it at RM360.49 million.

 

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