SPH restructuring will balance 'conflicting' expectations of public, shareholders: Lee Boon Yang

SINGAPORE: The choice to divest Singapore Press Holdings' (SPH) of its media enterprise will steadiness the "conflicting expectations" of the general public who reads its information merchandise, in addition to its shareholders and enterprise companions, mentioned chairman Lee Boon Yang on Thursday (Might 6).

Dr Lee introduced on Thursday that SPH will switch its media enterprise to a not-for-profit entity amid the problem of falling promoting income, exacerbated by disruptions attributable to the COVID-19 pandemic.

The brand new entity, SPH Media, might be below a brand new firm restricted by assure and the switch is predicted to happen three to 6 months after a shareholders' assembly in July or August to approve the transfer.

READ: SPH to restructure media enterprise into not-for-profit entity amid falling income

Dr Lee informed reporters at a media briefing that it was "no longer tenable" for SPH's media enterprise to be a part of a publicly listed firm.

"A new funding model is needed for SPH Media to remain financially sound and functionally robust in the long run," he mentioned. 

And whereas a listed firm would usually contemplate winding down a loss-making enterprise phase, this was not doable with SPH Media.

"SPH has a critical mission of serving several key stakeholders in Singapore - the public who read our news products, our shareholders, our staff as well as our business partners," he mentioned.

Dr Lee mentioned that SPH supplies credible information and knowledge to the general public, together with within the vernacular languages to serve Singapore's multi-ethnic communities.

"We cannot allow a functioning, trusted and respected media organisation to be whittled down over time by market pressure and commercial constraint," he mentioned.

"LITTLE SCOPE" FOR COST CUTS

Dr Lee mentioned that the media enterprise is predicted to stay loss-making, regardless that SPH has gone by a number of price administration workouts. 

The sooner retrenchments had been changes to the trade circumstances, Dr Lee mentioned, and with these the corporate "freed up resources" to reinvest in different areas like know-how, digital expertise and new content material creation functionality. 

However there "remains little scope for further cost cuts without impairing the ability to maintain quality journalism", he mentioned.

"So we have to balance sometimes conflicting expectations among stakeholders. This outcome that we are proposing is ... the most appropriate and balanced result for everybody."

SPH publishes nationwide broadsheet The Straits Occasions in addition to dailies in Chinese language, Malay and Tamil, together with different print and digital merchandise.

READ: About 140 staff from Singapore Press Holdings to be 'affected' by retrenchment train

The switch of SPH Media to a not-for-profit entity will assist to protect a various and aggressive media panorama in Singapore, he mentioned. This consideration to protect range was additionally a consider not merging with different media entities, Dr Lee added later.

"SPH Media will then be freed from the expectations of shareholders for a fair financial return and regular dividends. Its operating revenue can be reinvested in the media operations instead," mentioned Dr Lee.

It might probably additionally search funding from private and non-private events which have an curiosity in supporting high quality journalism and credible info within the public curiosity, Dr Lee added.

He promised that SPH Media will produce "responsible, objective and accurate journalism" below the brand new construction.

"These values are deeply embedded, you can say it's the DNA of SPH Media," he mentioned. "They will obviously receive public-private funding in the process, but they will not stray from the mission to maintain the credibility, trustworthiness and respect of the media by the Singapore public."

READ: SPH present process strategic evaluate 'to contemplate choices for its numerous companies'

HOW SHAREHOLDERS MAY BENEFIT

The transfer can even profit shareholders of the listed SPH firm, which can now not be held to restrictions on shareholding and different constraints below the Newspaper and Printing Presses Act (NPPA).

"SPH will have greater financial flexibility to tailor its capital and shareholding structure to pursue strategic growth opportunities across its other businesses and maximise returns for shareholders," he mentioned. 

He added that for shareholders, this restructuring will scale back the "drag" the media enterprise might have on the agency sooner or later.

SPH will present the preliminary assets and funding for SPH Media with start-up funds together with a money injection of S$80 million, S$30 million value of SPH shares and SPH REIT items. However there are not any plans for future injection of funds.

Addressing a reporter's query on the funds pumped into SPH Media, Dr Lee mentioned that shareholders must also perceive the belongings of the group took place from the media operations during the last many years. 

"It is only in recent years that media has suffered .... most of its 37 years, media was the main contributor. So it's not wrong to ensure ... that media should receive start-up grants from the parent company to ensure that it can take off in the future."

In his remarks to the media, Dr Lee recalled former Prime Minister Lee Kuan Yew's phrases to former President S R Nathan when he was appointed the manager chairman of the Straits Occasions Press, a couple of years earlier than the formation of SPH in 1984.

Then, Mr Lee Kuan Yew had known as The Straits Occasions a "bowl of china" and informed Mr Nathan: "If you break it, I can piece it together. But it will never be the same. Try not to destroy it."

Dr Lee mentioned on Thursday that along with the Straits Occasions, the way forward for all of SPH's publications at the moment are at stake.

"We are creating a new home for this fine china bowl. We are confident that in this new home, our media which has served our society over the decades will continue to enjoy the care, nourishment and support they need from our society if they are to thrive."