SINGAPORE, 2 November 2004 - SPH Magazines Pte Ltd ("SPHM"), which recently acquired the publishing business of Blu Inc, has teamed up with a Malaysian company, in a move which will strengthen its foothold in Malaysia and tap into the magazine business in the country, Singapore Press Holdings announced today.
SPHM entered into various agreements with Simpletech Sdn Bhd ("ST"), which is principally owned by Dato’ Mohd Ibrahim bin Mohd Nor, a prominent Malaysian businessman. He is also a director of Berita Publishing, a joint venture partner with SPHM which publishes and distributes magazines, such as Her World Malaysia, and provides contract publishing services in Malaysia, under a deal signed in July 2003.
The agreements pave the way for a restructuring of SPHM’s publishing subsidiaries in Malaysia, where it owns Blu Inc Media Sdn Bhd, following its recent acquisition of Blu Inc.
Following the restructuring, SPHM’s effective stake in its Malaysian operations will be reduced and that of its Malaysian partner will be increased. This tie-up with ST will give SPHM a stronger platform to expand into the region.
Besides the acquisition of Blu Inc which has brought the number of magazine titles it now publishes to 63, SPHM has made inroads into Indonesia, Thailand and China, making it the region’s leading magazine publisher.
Three joint ventures
Under the transaction, three joint ventures will be set up - one in
Malaysia and two in Singapore.
With this move, Blu Inc´s Malaysia magazine publishing arm, Blu Inc Media Sdn Bhd will become a subsidiary company of PT. Concurrently, PT will also acquire an additional 20% stake in Blu Inc Media Sdn Bhd, held by Alaff Positif, and 70% stake in Magazine World Sdn Bhd, which publishes Her World Malaysia.
These transactions will result in PT ultimately holding 92% of Blu Inc Media Sdn Bhd and 70% of Magazine World Sdn Bhd, consolidating the SPHM´s publishing business in Malaysia. PT will be the vehicle used to expand the SPHM´s magazine business in Malaysia.
The two Singapore joint ventures are:
BIV, through its subsidiary, Shanghai Blu Inc Ventures, publishes IFlair, a women´s magazine in China while BIP is the licensor for the women´s title Female in Indonesia.
Commenting on the joint ventures, Mr David Tay, Chief Executive Officer of SPHM, said: "The earlier acquisition of the publishing titles from Vantage Corporation Limited, which was previously known as Blu Inc Group Ltd, has strengthened SPHM’s foothold in the growing magazine market in Malaysia.
"The proposed transaction will consolidate and streamline SPHM’s business in Malaysia and increase our presence in the country.”
With this restructuring, SPHM´s effective stake in the Malaysia operations, Blu Inc Media Sdn Bhd, will be reduced from 72% to 46% while that of Magazine World Sdn Bhd will be increased slightly from 30% to 35%.
Mr Arthur Seet, Chairman of SPHM, said that although SPHM’s stake in the Malaysia operations would be lower, "SPHM now has a stake in a larger entity, and with a strong partner like Dato Ibrahim who knows the Malaysian publishing business intimately, we will have a stronger platform to grow and expand."
Welcoming the joint ventures, Dato´ Ibrahim of ST, who has held senior positions in Sistem Televisyen Malaysia Bhd (TV3), Padiberas Nasional Berhad, Malakoff Berhad and The New Straits Times Press Group, said: "I am very optimistic of the future of this partnership as it brings to the table three synergistic interests: the Blu Inc group, which is one of the most energetic and creative teams in the country; the SPH Magazines Group, an established and reputable magazine player in the region; and my own entreprenuerial track record which will complement and help this strategic alliance and make the joint ventures, collectively, a formidable player in the regional magazine industry.”
Upon completion of the three joint venture companies, ST will be granted options to increase its stake in PT and BIO from 50% to 60%, and in BIS from 10% to 20%, two years later.
These transactions are subject to approval from the Malaysian government’s Foreign Investment Committee, for SPHM’s ownership of 50% of the issued share capital in PT.
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About Singapore Press Holdings:
Main board listed Singapore Press Holdings Limited is the leading news and information provider, offering quality content for print, Internet, TV and radio. It publishes 14 newspapers in the four official languages. Everyday, nearly 2.8 million individuals, or 90 per cent of people above 15 years old, read one of the SPH publications. Its Internet arm, SPH Internet Business, manages the online editions of SPH’s major newspapers and magazines, which together enjoy some 300 million pageviews a month. Its magazine arm, SPH Magazines, publishes 63 titles. SPH operates two popular free-to-air TV channels, Channel U in Chinese and Channel i in English, as well as two entertainment radio channels, UFM 100.3 FM in Chinese and WKRZ 91.3 FM in English, under a joint venture company UnionWorks with NTUC Media.