Singapore Press Holdings (SPH) in a filing with SGX has announced the restructuring of its media business into a not-for-profit-entity. SPH’s media business will be transferred to a newly incorporated wholly-owned subsidiary, SPH Media Holdings Pte Ltd (“SPH Media”). SPH said they will provide the initial resources and funding by capitalising SPH Media with a cash injection of S$80mn ($60mn), S$30mn ($22mn) in SPH shares and SPH REIT units, as well as SPH’s stakes in four of its digital media investments. Under the restructuring proposal, SPH Media will eventually be transferred to a not-for-profit entity company limited by guarantee (CLG) for a nominal sum, they added.
SPH’s decision comes on the back of several factors. Its media business recorded its first-ever loss of S$11.4mn ($8.5mn) financial year ending August 2020 and half-yearly pre-tax profits ending February 2021 fell 71% to S$3.1mn ($2.3mn) YoY. Both figures would have been deeper in the red if not for the Jobs Support Scheme (JSS) they noted. Despite resumption of business activities post-lockdown, the decline in advertising revenues are expected to continue at a similar pace to the last five years where operating revenues have halved. Despite cost-cutting measures, there is little scope for further cost cuts without impairing its ability to maintain quality journalism, SPH noted. SPH said that the transaction would help reduce any future funding requirements/losses from the group’s financials and that it will be able to tailor its capital and funding structure better in an analyst briefing. SPH earlier today requested for a trading halt in a filing with SGX.
For access to SPH’s filings, click here