MPB to chuck Philippines’ Primedia equity

MEDIA PRIMA   TELEVISION   MEDIA  INVESTMENTS

• MPB set to recover Philippines investment
• Proposed divestment of Primedia to Mediaquest Holdings for US16 million
• Move will avoid further burden to MPB earnings
  

Malaysia - Media Prima Berhad (MPB) is set to recover its investment in the Philippines following the proposed divestment of its entire 70% equity stake in its subsidiary, MPB Primedia Inc (Primedia) to Mediaquest Holdings Inc. for US$16 million.

The announcement puts an end to speculation in the local press about MPB's investment in Philippines TV.

In March 2008 MPB invested in Primedia, a company that had entered into a block airtime and consultancy agreement with ABC5, a national free to air television network in the Philippines as an initial seed for its proposed Media Fund (the Fund).

MPB hoped the Fund would allow it to part invest in and manage various regional media assets in the long term while minimising the impact of the expected gestation losses from these assets on MPB's earnings and balance sheet.

The media gaint has blamed the global financial crisis for this latest setback in the Phillipines adding that it led to the extreme difficulty in raising private equity funds to invest together with MPB in the Fund.

"Despite our divestment, the TV5 investment has been an important experience for MPB, providing us with invaluable lessons in applying our operational philosophy across a different regional and highly competitive market," MPB's Group MD Dato' Amrin Awaluddin, said.

"However, this divestment will avoid any further dilution and burden to MPB's earnings and cashflow and would enable investors to fully value MPB by removing any future earnings uncertainty," he said.

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