Singapore presses to transform media into a non-profit entity

(Bloomberg) – Singapore Press Holdings Ltd., which publishes the country’s flagship daily, is considering splitting its media business into a non-profit entity after conducting a strategic review of its business.

Faced with a steady decline in the media sector, Singapore Press – which also invests in properties ranging from shopping malls to student housing – contacted the government with a proposal to put the unit on a sustainable financial footing, he said. he said in a statement on Thursday. The government has indicated its support for the restructuring, he said.

“SPH shareholders are unlikely to tolerate the continued negative impact that media activity has on the company’s financial outlook,” company chairman Lee Boon Yang said in a briefing. “On the other hand, we cannot allow a functioning, reliable and respected media organization to be weakened over time by market pressure and commercial constraints.”

The company will provide initial resources and funding worth at least S $ 110 million ($ 82 million) for a new unit, which will eventually be transferred to a non-profit entity.

This structure which allows the media sector to “seek funding from a range of public and private sources with a common interest in supporting quality journalism and credible information is the optimal solution,” the company said in a statement. . The Straits Times and Business Times editor added that liquidating or selling the business were not feasible options given the function of providing news and information to the public.

Last year, the conglomerate hit its first-ever full-year loss, based on data compiled by Bloomberg dating back to 1990, after consecutive years of declining net income. Its media business accounted for more than half of its revenue last year, while real estate accounted for around 38%, according to data compiled by Bloomberg.

New model

Singapore Press said that while such a model may not be familiar in the country, many overseas news agencies operate under these funding structures. These include the Guardian in the UK which has been controlled by the Scott Trust since 1936 and the Tampa Bay Times in the US, which is owned by the nonprofit Poynter Institute, he said.

SPH shares were suspended on Thursday pending the release of the announcement. They have gained 17% since the end of March, set for their third consecutive quarter of gains.

Shares hit their highest level in more than a year in April, before reducing some of those gains, after the company announced in March that it was undertaking a strategic review to consider options for its various businesses.

During the meeting, Director General Ng Yat Chung said that the review of his remaining activities is continuing.

Credit Suisse Group AG is financial advisor to Singapore Press, while Evercore Asia (Singapore) Pte. has been appointed to advise the board of directors of the company.

(Updates with Chairman’s comments in the third paragraph and advisers in the last paragraph)

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