No rating impact from Media Prima’s Rev Asia acquisition, says RAM Ratings

KUALA LUMPUR: RAM Rating Services Bhd expects Media Prima Bhd’s plan to acquire full ownership of Rev Asia Holdings Sdn Bhd (Rev Asia) for RM105 million to have no immediate rating impact.

Media Prima carried corporate credit ratings of AA1/Negative/ P1 and so does it’s RM500 million commercial paper/medium term note programme.

RAM Rating Head of Consumer and Industrial Ratings Kevin Lim, in a statement yesterday, said the corporate exercise was recognised as a positive effort to diversify Media Prima, given the decline in traditional advertising expenditure and growing popularity of digital platforms but the earnings accretion from the proposed acquisition was not expected to sufficiently mitigate declining earnings from traditional media platform.

“While the proposed acquisition is expected to provide an avenue for Media Prima to reduce its dependence on traditional media assets and/or strengthen its media outreach, earnings contributions from the new unit over the near-term are not anticipated to be sufficient to make up for the steady decline in earnings from its traditional media platforms in the past few years,” he said.

Lim also said the exercise, expected to be completed by the third quarter of the year, would enable the company to capitalise on Rev Asia’s strengths, as well as, expand its digital reach to become the largest Malaysian digital platform in terms of number of unique visitors.

“The generally younger audience of these sites will further provide Media Prima access to the urban, tech-savvy segment of the population (18-35 years old), complementing its current more mature market.

“Additionally, we note that these digital assets will enhance the media conglomerate’s existing business profile, allowing it to cross sell its products/ services across a wider range of platforms,” he said.

Lim said the negative outlook on Media Prima’s ratings reflected the rating agency’s concerns over Media Prima’s reduced print circulation, as well as, lingering uncertainty surrounding the roll out of digital terrestrial TV and increasing threat from digital media. — Bernama SHORT-TERM interbank rates closed stable yesterday on Bank Negara Malaysia’s (BNM) intervention to absorb excess liquidity from the financial system.

The liquidity surplus in the conventional system fell to RM34.80 billion from RM40.95 billion in the morning, while in THE Kuala Lumpur Tin Market (KLTM) rose US$200 to settle at US$19,900 a tonne yesterday on continued buying support for the metal, a dealer said.

The dealer said the firmer price was in line with the better overnight performance of tin on the benchmark London Metal