KUALA LUMPUR (Aug 20): Utusan Melayu (Malaysia) Bhd has been classified as a Practice Note 17 (PN17) company as it has defaulted in its principal and profit payment to Maybank Islamic Bhd and Bank Muamalat Malaysia Bhd, totalling RM1.18 million, and is unable to provide a solvency declaration to Bursa Malaysia.
In a filing with the exchange today, the Malay-language newspaper and magazine publisher said that pursuant to the PN17, the company is required to submit a regularisation plan to the Securities Commission if the plan will result in a significant change in business direction or policy of the company, or to Bursa Malaysia if the plan will not result in a significant change in the business direction or policy of the company — within 12 months from today.
In the event Utusan fails to comply with the obligations to regularise its condition, the company’s listed securities will be suspended from trading on the sixth market day after the date of notification of suspension by Bursa Securities and de-listing procedures shall be taken against the company.
“The company is looking into formulating a regularisation plan to address its PN17 status and will make the necessary announcement on the regularisation plan in due course,” Utusan said.
On Aug 10, Utusan announced that it had defaulted in its repayments of principal and profit amounting to RM1.18 million for two facilities, namely its Muamalat Revolving Financing with Bank Muamalat totalling RM530,121 and its banker’s acceptance with Maybank Islamic totalling RM654,750 — due to financial constraints.
In a separate filing on the same day, Utusan proposed to undertake a private placement of up to 10% of its issued shares, to raise gross proceeds of RM2.1 million.
Utusan said up to 11.07 million new shares, representing 10% of the 110.73 million issued shares, may be issued for the private placement.
The filing added that the proceeds are intended to be used by the group to repay bank borrowings and expenses in relation to the proposed private placement.
Utusan, which publishes four newspapers namely Utusan Malaysia, Mingguan Malaysia, Kosmo! and Kosmo! Ahad and magazines such as Wanita, URTV, Harmoni, Mastika and Saji has been loss making for the past six of its financial years, with its last full year profit reported in Dec 31, 2011, as its newspaper publishing and advertising businesses saw a decline in revenue over the years.
Its shares closed down 2.3% today to 21 sen for a market capitalisation of RM23.25 million. Year to date, its shares have dropped by 45%, with RM18.8 million in market capitalisation erased.