Utusan Malaysia and its sister tabloid Kosmo! is ceasing operations after a period of financial difficulty. According to multiple media reports including The Star, which quoted executive chairman Datuk Abd Aziz Sheikh Fadzir, the company is “penniless” and staff representatives were informed of the news by the Human Resources Ministry during a meeting on 19 August.
Both Utusan Malaysia and Kosmo! are under the Utusan Group, which has not paid its staff since June, The Star reported. Meanwhile, multiple media outlets reported that current and former employees of Utusan Malaysia also recently protested outside the company’s headquarters over unpaid wages. Utusan Malaysia was founded by Yusof Ishak before he became Singapore’s first President and was first published in Jawi in 1939.
In a Bursa filing on 19 August, the board of Utusan announced that it is unable to submit its regularisation plan as prescribed under Practice Notes 17 (PN17), within 12 months from the date of its admission as PN17 issuers. PN17 concerns companies that are in financial distress and those which fall within the definition of PN17 are required to submit their proposal to the approving authority to restructure and revive the company. This is in order to maintain its listing status.
The board said that the group is unable to meet Bursa’s requirements to uplift the PN17 status, after taking into consideration the losses incurred in the first two quarters of 2019 and cash flow constraints.
During the second quarter of its financial year ended 30 June 2019 (Q2 2019), Utusan posted a 59% drop in year-on-year revenue from RM63,872 million to RM25,908 million in Q2 2019. It also recorded a RM3,866 million operating loss this quarter. Over the past six months, Utusan saw a dip in revenue from RM119,384 million in Q2 2018 to RM52,655 million this quarter. The filing added:
The group is also not be able to find any potential investor to participate in order to revive the group, mainly due to its huge liabilities.
As such, the filing said Bursa Securities has the right to proceed to “suspend the trading of the listed securities of Utusan and to de-list the company”, in the event that it fails to submit a regularisation plan to the authorities on or before 19 August 2019; fails to obtain the approval from any of the regulatory authorities necessary for implementation of its regularisation plan; and fails to implement its regularisation plan within the time frame or extended time frame stipulated by any of the regulatory authorities.
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