SPH will need to clarify future plans to secure shareholder approval

SINGAPORE Press Holdings' (SPH) announcement of its restructuring and hiving off of the media business into a company limited by guarantee has come as a surprise to many. For several years now, SPH has been reviewing and diversifying its investments. SPH had also undertaken strategic initiatives in digital content. But the media business has been on a decline for the past five years, with media operating revenue having halved during this period.

SPH asserts that being a listed media company provides some challenges. For example, the Newspaper and Printing Presses Act requires any acquisition of shareholding above 5 per cent to be approved by the Minister for Communications and Information.

This restructuring proposal seeks to serve as a long-term sustainable financial solution for SPH. It balances the interests of the wider public, in the provision of quality news and information, with the interests of the group's shareholders, by eliminating both losses as well as the need for future funding.