SINGAPORE, 6 April 2004 – SPH today announced major initiatives to return surplus capital to shareholders and make SPH shares more affordable for retail investors.
Mr Alan Chan, Chief Executive Officer of SPH said: “The proposed transactions demonstrate SPH´s drive to improve returns for shareholders, our commitment to managing the Company´s capital on an ongoing basis and, where appropriate, returning surplus capital to shareholders.”
SPH will remain in a strong financial position following the capital return and is well-positioned to execute the Company´s strategy of pursuing growth in its core business and to pursue other growth opportunities as and when they arise.
In relation to its non-core assets, Mr Chan said: “In the context of our broader strategy and commitment to return surplus capital, the Company plans to divest non-core assets over the next three to four years as opportunities arise.”
“If the proceeds of such divestments are in excess of the Company´s capital requirements at the time, we would look to return that capital to shareholders in the form of special dividends, share buy backs or capital reduction.”
SPH is proposing a capital return to shareholders of approximately S$1 billion, representing 15% of shares in issue. The capital return will be effected by way of a pro-rata capital reduction, which ensures that all shareholders are treated equally.
At the capital return price of S$19.10 (on a pre-split basis), which is the volume-weighted average trading price (VWAP) of SPH´s shares over the 5 market days to 5 April 2004 (rounded up to the nearest multiple of 10 cents), each shareholder will receive a cash distribution of S$2,865 for every 1,000 shares held.
The proposed capital return will significantly enhance SPH´s return on equity (ROE) and earnings per share (EPS). On a proforma basis for the 2003 financial year, the capital return would raise SPH´s ROE from 16.7% to 30.1%, and enhance EPS by 15.0%.
Mr Chan said: “The capital return allows a substantial cash distribution to be made to shareholders, while enabling each shareholder to maintain the same proportionate shareholding in the company.”
To improve the accessibility of its board lot of 1,000 shares to smaller investors, SPH is proposing, in conjunction with the capital return, a 5-for-1 share split. As a result of the split, a 1,000 board lot that currently costs S$19,100 (based on the 5-day VWAP) would cost S$3,820 following the share split.
The capital reduction and share split are subject to the approval of the SGX and SPH´s shareholders at an extraordinary general meeting, as well as the approval of the High Court.
UBS Investment Bank is acting as financial adviser to SPH on the proposed transactions.
Please see attached pdf file on proposed sub-division and capital reduction.
Issued by Singapore Press Holdings Limited
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Assistant Vice President
Singapore Press Holdings
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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 and six lifestyle periodicals. Everyday, 2.78 million individuals, or 90 per cent of people above 15 years old, read one of the SPH publications while the online editions of its six main dailies enjoy some 120 million pageviews a month. SPH has ventured into the broadcast medium and operates two popular free-to-air TV channels, Channel U in Chinese and Channel i in English. It also operates 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.
For more information about SPH, please log on to www.sph.com.sg