Utusan needs RM400 million to settle debts, outstanding wages

Media company Utusan Melayu (M) Bhd, which shut its doors early this month, will need some RM400 million to settle its debts and liabilities and pay compensation and outstanding salaries owed to more than 1,500 former employees, sources say.

(FMT) – This was among matters brought up by the company’s interim liquidators UHY Advisory during a meeting with about 500 former Utusan Melayu staff yesterday.

“Despite its assets, the company is short of between RM40 and RM50 million to pay borrowers and banks,” the staff were told during the special session at the Utusan Melayu headquarters in Kuala Lumpur.

“Estimation and valuation are still underway, especially those involving subsidiaries of the Utusan Group,” a source told FMT.

It is believed that Utusan Melayu is saddled with RM335 million in liabilities.

The company has some RM190 million in assets including a factory in Bandar Baru Bangi, a corporate office in Sungai Besi and properties across the country.

It is also facing a deficit of about RM145 million, excluding the liquidation fee.

“This does not include assets involving subsidiaries of Utusan Melayu,” the source added.

Utusan Group, which comprises newspapers Utusan Malaysia and Kosmo! as well as various magazines under Utusan Melayu Bhd ceased operations on Oct 9 following a board decision on voluntary liquidation.

Utusan, which started as a Jawi daily in Singapore in 1939, was the country’s oldest Malay language daily.

The Umno-linked paper was often criticised for its uncomplimentary coverage of opposition leaders during the Barisan Nasional rule. At its height, the company employed 2,000 people including some 500 editorial staff.

Yesterday’s meeting did not touch on the future of some 800 workers terminated this month.

“The focus now is to settle debts and dispose Utusan Melayu’s assets. They have promised to pay salaries for September and October,” the same source told FMT.

On Oct 22, the human resources ministry ordered Utusan Melayu to pay its former employees the wages owed to them as well as all outstanding Voluntary Separation Scheme (VSS) payments to staff involved in the retrenchment exercise last year.

Utusan had offered VSS to about 700 former staff, of a total of 1,500 axed last year.