Utusan cashes out stake in property development unit for RM48m

Utusan cashes out stake in property development unit for RM48m
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KUALA LUMPUR (Dec 21): Utusan Melayu (Malaysia) Bhd (Utusan) has disposed of its entire 20% stake in Maqamad Sdn Bhd to MHA59 Sdn Bhd for RM48 million to improve its operating cash flow and strengthen its financial position.

In a filing with Bursa Malaysia today, the loss-making publishing company said its unit Utusan Land Sdn Bhd had entered into a share sale agreement with MHA59 for the proposed disposal last Thursday (Dec 17).

The deal involves the disposal of Utusan Land's entire 20% equity interest or 100,000 shares in Maqamad to MHA59.

Utusan said the original cost of investment in Maqamad was RM100,000 incurred in April 2015.

Maqamad is principally involved in property development and general trading, and is actively seeking to increase its land bank for future business expansion, said Utusan.

MHA59 is a Subang-based private company, principally involved in the leasing of intellectual property and similar products (except copyrighted works), business management consultancy services and the development of building projects for its own operation.

"The proceeds are expected to be utilised for Utusan group's day-to-day operation to support the existing business operations, which include payment of trade and other payables within 12 months," Utusan said.

Utusan said the disposal is expected to result in an improvement to its earnings by approximately RM48 million for the financial year ending Dec 31, 2015, and contribute positively to its earnings per share.

The publishing company, which is 49.77%-owned by Umno and publishes the Utusan Malaysia and Kosmo! newspapers, has been loss making since 2012.

It saw net loss rise to RM8.29 million or 7.49 sen loss per share for the third quarter ended Sept 30, 2015 (3QFY15), from RM5.72 million or 5.16 sen loss per share a year ago, due to lower contribution from its publication, distribution and advertisement segment.

Revenue for 3QFY15 fell 18.4% to RM61.06 million, from RM74.82 million in 3QFY14.

For the cumulative nine-month period (9MFY15), the group's net loss also increased 21.4% to RM44.39 million or 40.09 sen loss per share from RM36.57 million or 33.03 sen loss per share in 9MFY14; revenue for 9MFY15 dropped 15.7% to RM180.93 million, from RM214.69 million a year ago.

Shares in Utusan closed unchanged at 57 sen today, for a market capitalisation of RM63.12 million.

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