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Reuters: TV3 dips to record low
By Benjamin Low
10/4/2001 5:53 am Tue
[Saham TV3 menjunam 28.8% hari ini untuk mencecah keparas terendah
42 sen se saham sejak ia ditubuhkan pada tahun 1988. Ia bercadang untuk
membayar cuma 70% sahaja hutang. Jika tidak ia mungkin tertenggelam...
Bagi reformis - ini petanda laungan dan perjuangan selama ini sudah pun
Monday April 9, 6:57 PM
UPDATE 1-Malaysia's TV3 dips to record low
(Updates with closing share price)
By Benjamin Low
KUALA LUMPUR, April 9 (Reuters) - Sistem Televisyen Malaysia
(TV3) shares slumped to a record low on Monday after the ailing
television network operator said it would slash its share capital by
half as part of plans to stay afloat.
TV3 unveiled late on Friday a long-awaited plan to repay 714.6
million ringgit ($188 million) of debt including a proposal to reduce its
share capital to 85.15 million ringgit, effectively cutting its
shareholders' investments by half.
"The successful implementation of the proposed restructuring scheme
would mitigate an impending liquidation, suspension and delisting of
TV3," the company said in a statement.
But discontent about the capital reduction, which leaves
shareholders with half the number of shares they currently own, sent
the stock tumbling 28.8 percent to end at 42 cents, the lowest since
TV3 was listed in 1988.
On the year, the stock has dropped 61 percent compared with a
decline of 18 percent in the key index.
Concern about TV3's debt has hit the shares, making them the
second worst-performing on the benchmark Composite Index
<.KLSE> in the first three months of the year.
The unprofitable television station had little choice but to cut its
capital to offset mounting losses, analysts say.
TV3 has accumulated losses of about 511.5 million ringgit after the
country slipped into a recession in 1998, with advertising revenues
"They had to go through with the capital reduction," said an analyst
at a foreign brokerage. "Three parties will have to bear the
Those three parties are TV3's creditors, majority owners and minority
shareholders -- all of whom will be hurt by the reorganisation plan.
But TV3 may have a tough time getting creditors to accept the plan,
"The scheme may also not pass creditors. Thus, the completion of
the scheme may be delayed, and the scheme as outlined may yet
undergo changes," said KAF Seagroatt & Campbell in a report.
Under the restructuring plan, TV3 is asking creditors to waive 214.4
million ringgit, or 30 percent, of its total debts.
TV3 will repay 133.21 million ringgit of debts in cash while the
remaining 367 million ringgit will be swapped for new covertible
preference shares and new ordinary shares.
The creditors will then sell some of the shares to TV3's shareholders,
who will have to subscribe to the offer.
The sale will be made at a ratio of three ordinary shares and one
preference share at 1.0 ringgit each for every four ordinary shares
currently owned by shareholders.
As part of the reorganisation, TV3 will sell 75 million new shares to
Simpletech Sdn Bhd, a private company controlled by TV3's
executive vice chairman Mohd Ibrahim Mohd Nor.
Simpletech will emerge as the television network's new controlling
shareholder with a 21 percent stake. Malaysian Resources Corp ,
TV3's current parent, will see its stake drop to 20.8 percent from 49.6
Creditors will end up with a 37.1 percent stake while minority
shareholders will own the remaining 21 percent of TV3, down from
50.4 percent currently.
But the current slump in TV3 shares may have opened up buying
opportunities for investors seeking bargains.
The restructuring will put TV3 on a stronger financial footing, helping
it reverse three years of losses. And that will eventually drive a
recovery in TV3 shares, analysts say.
"After the restructuring, going forward, the shares could be worth between one and 1.50 ringgit each. You can still make a profit if you buy now," said the foreign brokerage's analyst.