1)   What are the main media assets within Media Prima Berhad (MPB) group?

2)   What is the background of MPB?

3)   Who are the substantial shareholders of MPB?

4)   Please elaborate on the convertible instruments of MPB.

5)   Please elaborate on MPB’s borrowings.

6)   What is the status of the acquisitions undertaken in recent years?

7)   How does MPB differentiate its television stations and radio channels from one another?

8)   What is MPB’s dividend policy?

9)  Please elaborate on the financial performance of MPB.

1)  What are the main media assets within Media Prima Berhad (MPB) group?

      The main group structure is depicted in the following diagram:

2)    What is the background of MPB?

       
MPB was established pursuant to a comprehensive group and debt restructuring exercise involving the de-merger of Malaysian Resources Corporation Berhad’s media assets, namely Sistem Televisyen Malaysia Berhad (“TV3”) and the New Straits Times Press ( Malaysia) Berhad (“NSTP”). Under the corporate restructuring exercise completed in August 2003, MPB acquired a 100% equity stake in TV3 and a 43% equity stake in NSTP. MPB assumed the listing status of TV3, which culminated in the successful listing of MPB on the Main Board of Bursa Malaysia Securities Berhad on 22 October 2003.

In 2003, MPB also acquired an 80% equity stake in Merit Idea Sdn Bhd, which owns a 99.5% stake in Metropolitan TV Sdn Bhd, a company with a Content Application Service Provider license for free-to-air ("FTA") television broadcasting. This enabled the group to launch a second television network under the brand of “8TV” on 8 January 2004. On June 11 2007, MPB had entered into a conditional share sale agreement with Intact Media Sdn Bhd to acquire the remaining 20% equity stake in MISB.

MPB also completed its 100% acquisitions of CH-9 Media Sdn Bhd, the owner and operator of the former Channel 9 television network and Natseven TV Sdn Bhd, the owner and operator of ntv7 television network in 2005. Channel 9 was re-launched as TV9 on 26 April 2006.

Year 2005 also witnessed MPB’s maiden efforts to venture into radio broadcasting through the acquisition of Perintis Layar Sdn Bhd, which holds a 75% stake in Max Airplay Sdn Bhd (“Max”). Max has been awarded the right to manage, operate and maintain a radio station by Malaysia Airports (Sepang) Sdn Bhd. In addition, MPB also acquired Synchrosound Studio Sdn Bhd, a radio broadcasting license holder, during the same year.

 

3)    Who are the substantial shareholders of MPB?

        As at 31 October 2008, the substantial shareholders of MPB are as follows:

(i)  Employees Provident Fund Board (24.73%)

(ii) Kuala Lumpur City Nominees (Tempatan) Sdn Bhd

      KLCS Asset Management Sdn Bhd for Gabungan Kesturi Sdn Bhd (14.41%)

(iii) Harris Associates L.P. (8.37%)

(iv) Altima Inc (5.44%)

 

4)     Please elaborate on the convertible instruments of MPB.

i) Irredeemable Convertible Unsecured Loan Stocks (“ICULS”)
As at 31 October 2008, there are no ICULS outstanding. The exercise period is from 18 July 2005 to 18 July 2008. Three (3) ICULS are convertible into two (2) new ordinary shares of RM1.00 each in MPB.

ii) Warrants
As at 31 October 2008, there are no warrants outstanding. The exercise period is from 31 July 2003 to 31 July 2008. Each warrant entitles the holder to subscribe for one (1) new ordinary share of RM1.00 each in MPB at an exercise price of RM1.10 each.

iii) Employee Share Option Scheme (“ESOS”)
The scheme is effective for a period of five (5) years expiring on 10 January 2010. As at 31 October 2008, there are 9.72 million ESOS options outstanding. The options were granted at exercise prices of RM1.46 per share, RM1.55 and RM2.23 per share respectively.

 

5)    Please elaborate on MPB’s borrowings.

As at 30 June 2008, being the latest available date of the quarterly unaudited consolidated results of MPB, the borrowing details (including ICULS) are as follows:

 ^Notes:

^{(i) On 7 September 2007, MPB issued BG MTN amounting to RM170.0 million in nominal value pursuant to the BG MTN Programme. On 12 September 2007, MPB issued CP amounting to RM100.0 million in nominal value pursuant to the CP Programme.}

^{The principal terms of the CP/BG MTN are as follows:}

^{(a) The face value of the CP is RM100 million and the BG MTN is RM170 million;
(b) The CP are issued at a discount to face value and shall be repayable at par;
(c) The interest on the BG MTNs of RM100 million and RM70 million are 4.15% and 4.27% per annum respectively, payable semi-annually in arrears, calculated on the basis of the actual number of days elapsed in a year of 365 days with the last payment of interest to be made on the maturity date of the BG MTNs;
(d) The tenure of the BG MTN is up to 5 years from the date of issue; and
(e) The maturity date of the CP is between one (1) to twelve (12) months up to 7 years.}

^{(ii)Term loans obtained by MPB.}

^{(iii) MPB issued 180,000,000 2% five (5)-year ICULS on 18 July 2003 at a nominal value of RM1.00 each for cash to finance the acquisition of The New Straits Times Press (Malaysia) Berhad (“NSTP”), which was constituted by a Trust Deed dated 10 July 2003.}

^{The principal terms of the ICULS are as follows:}

^{(a) The face value of the ICULS is RM180 million;
(b) The ICULS bear interest of 2% per annum payable semi-annually in arrears, except for the first payment which was made on 31 December 2003 and the last payment which is due on the maturity date, 18 July 2008. Interest is calculated on the basis of the actual number of days elapsed;
(c) The tenure of the ICULS is five (5) years from the date of issue;
(d) The ICULS are convertible at any time on and after 18 July 2005 into new ordinary shares in the Company at the conversion ratio at RM3.00 nominal value of ICULS to two (2) ordinary shares of RM1.00 each;
(e) The new ordinary shares allotted and issued upon conversion of the ICULS will be considered as fully paid up and will rank pari passu in all respects with the existing ordinary shares of the Company; and
(f) The ICULS are listed on Bursa Malaysia.}

6) What is the status of the acquisitions undertaken in recent years?

(i) Perintis Layar Sdn Bhd (“PLSB”)

The acquisition of PLSB was completed on 29 April 2005. The radio station operated by Max Airplay Sdn Bhd, a 75% subsidiary of PLSB, was launched as Fly.fm on 2 October 2005.

(ii) CH-9 Media Sdn Bhd (“Channel 9”)

MPB completed the acquisition of 100% of Channel 9 on 23 September 2005. The television station was re-launched as TV9 on 26 April 2006.

(iii) Natseven TV Sdn Bhd (“ntv7”) and Synchrosound Studio Sdn Bhd (“Synchro”)

The scheme creditors approved the proposed debt restructuring scheme on 27 September 2005 paving the way for the acquisition of ntv7. The acquisition of ntv7 was completed on 30 December 2005.

Synchrosound was acquired together with the acquisition of ntv7. The radio station owned by Synchro (previously known as WaFm), had ceased transmission on 1 October 2005. The radio station was re-launched as Hot.fm, a Malay station on 6 February 2006.

(iv) UPD Sdn Bhd ("UPD")

The acquisition of UPD from the Utusan group was completed on 28 February 2007.

(v) The Right Channel Sdn Bhd ("TRC")

On 28 February 2007, MPB completed the acquisition of TRC from the NSTP group.

(vi) Big Tree Outdoor Sdn Bhd ("BTO")

MPB completed the acquisition of BTO on 30 March 2007, a leading outdoor advertising outfit in Malaysia which is planned to spearhead MPB's expansion into the outdoor segment.

7) How does MPB differentiate its television stations and radio channels from one another?

There are four (4) FTA television stations under MPB’s television networks: TV3, 8TV, ntv7, and TV9. TV3 is targeted towards the mass market skewed towards the Malay audience, with progressive mindsets. 8TV targets the young Malaysians, urban and Chinese audience from the 15-24 age group. ntv7 targets the Malaysian urban households from the 24-45 age group, kids & Chinese audience. TV9 is targeted towards the mass market skewed towards the “traditionalist” Malay audience.

There are two (2) radio stations under MPB’s radio networks: Fly.fm and Hot.fm. Fly.fm is targeted towards the urban youths from the 18-25 age group and young adults from the 25-35 age group. Hot.fm is targeted at the mass market skewed towards the Malay listeners. 

8) What is MPB’s dividend policy?

The dividend payout is based on consolidated Profit After Tax and Minority Interests (“PATAMI”) on a tiered basis ranging from:

(i) Minimum of 20% for the first three (3) years; and
(ii) Maximum of 50% thereafter.

Management shall be accorded the flexibility to adjust the Dividend Payout Ratio (within the range of 20% to 50%) based on:

• PATAMI
• Funding requirement (capital expenditure and investments);
• Availability of cashflow; and
• Availability of Section 108 tax credits

9) Please elaborate on the financial performance of MPB.

MPB, in its efforts to continuously improve its investor relations function, releases a set of presentation materials after the announcement of its quarterly consolidated results to the Exchange. Please refer to these quarterly presentation materials available on pdf. format on MPB’s website here. If you have any further queries, please email us at investors@mediaprima.com.my