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Stockwatch- Media Prima buying UPD, The Right Channel

The Edge Malaysia
30-11-2006: Media Prima buying UPD, The Right Channel By Alfean Hardy

Media Prima Bhd is expanding its outdoor advertising segment by acquiring a company each from Utusan Melayu (Malaysia) Bhd and The New Straits Times Press (Malaysia) Bhd (NSTP).

Media Prima announced on Nov 30 it was acquiring UPD Sdn Bhd from Utusan and The Right Channel (TRC) from its associate company, NSTP, for RM1 each. UPD recorded a net loss of RM2.52 million and had net liabilities of RM14.8 million as at Dec 31, 2005. TRC recorded a net loss of RM1.94 million and had net liabilities of RM4.42 million as at Dec 31, 2005.

UPD owns 2,400 active outdoor advertising panels mainly in the Klang Valley and has a long-term concession on the STAR light rail transport system. TRC manages, sells and maintains outdoor advertisements from billboards to transit advertising.

“Both acquisitions are to be undertaken at nominal value but with the vendors of the two companies being assured of certain level of repayment for previous advances made to the companies,” it said.

Media Prima managing director and chief executive officer Abdul Rahman Ahmad said: “We believe UPD and TRC have many strategic assets that can be unlocked and represent a considerable opportunity to generate significant value going forward.”

Media Prima had earlier announced it was acquiring outdoor media advertising company Big Tree Outdoor Sdn Bhd (BTO).

“Using Big Tree Outdoor as the anchor entity for our outdoor operations, Media Prima will have the opportunity to enjoy economies of scale through streamlining the backroom functions and operations of Big Tree Outdoor, UPD and TRC,” he said.

In a separate statement, Utusan said Media Prima would ensure advances amounting to RM9.2 million as at June 30, 2006 — which Utusan had advanced to UPD — would be paid back by UPD over two years.

posted by gsg @ 11:22 AM