SINGAPORE: Following a financial analysis, Singapore Press Holdings’ (SPH) appointed independent financial adviser has advised the company’s directors to recommend that shareholders vote in favour of the proposed restructuring of its media business.

       The independent financial adviser, Evercore Asia (Singapore), said in a letter to the board of directors that the restructuring would prevent SPH from having to bear potentially significant and recurring losses of the media business going forward.

       It added that the move will allow SPH to “set a clear strategic direction” with a focus on the real estate sector and related segments of student accommodation and aged care while eliminating the risks and uncertainties associated with the media business.

       In addition, with the lifting of the Newspaper and Printing Presses Act once the media business is hived off, there will be opportunities for shareholders or investors to own more than 5% of shares in the company, which will expand its strategic options.

       SPH, which publishes The Straits Times and The Business Times, had announced in May that it will be transferring its media business to a newly formed public company limited by guarantee.

       The move comes as structural changes in the media and advertising industries amid a digital era have severely disrupted the traditional business model that relied on print advertising revenue.

       “While the company has succeeded in increasing digital circulation, monetisation is increasingly challenging as competition for digital revenue has intensified and the company’s media business now competes with much larger players,” said Evercore, adding that digital subscription and digital advertising have not been able to make up for declines in print.

       SPH’s media segment’s operating revenue fell 50.7% between financial year 2015 (FY15) and FY20, largely due to decline in print advertising and print subscription revenue. — The Straits Times/ANN