SPH inks $150m loan facilities with 2 local banks - Nov 19, 2008 (ST)
The Straits Times / The Business Times News On SPH
SPH inks $150m loan facilities with 2 local banksThe funds will be used for working capital and general corporate funding.
By Lee Su Shyan
Nov 19, 2008
The Straits Times
SINGAPORE Press Holdings (SPH) is taking out $150 million worth of loan facilities with local banks DBS and OCBC.
The media giant said yesterday it had inked separate agreements with the two banks. The tenure is for three years and the funds will be used for working capital and general corporate funding.
This is likely to include the upcoming payment of the proposed final tax-exempt dividend of 19 cents a share for the financial year ended Aug 31.
The payout comprises a normal dividend of nine cents per share and a special dividend of 10 cents per share. The dividend faces a shareholder vote at the Dec 4 annual general meeting. If approved, payment will be made soon after.
Although SPH has an investment portfolio of about $1 billion, it is unlikely it will want to sell some assets for cash in these uncertain times.
An SPH spokesman said: 'Current market prices are low due to the financial turmoil. We believe that funding our working capital needs through the loan facilities will allow us the maximum flexibility in the deployment of funds to pursue appropriate business opportunities should they arise.'
The firm has announced various initiatives in recent months. It is a partner in the OpenNet consortium with Canadian company Axia NetMedia, SingTel and SP Telecom that will build Singapore's new ultra-fast Internet infrastructure.
Market observers say SPH's ability to secure term loans under such tight credit conditions is a sign that its finances are seen to be in good shape. In particular, the media company secured the loan facilities on unsecured terms.
Companies have been saying that loans have been hard to come by, and financing expensive.
Palm-oil giant Wilmar International said last week that one of its credit lines had been cancelled, although this was due to the bank exiting commodity finance rather than a sign of trouble.
However, chairman Kuok Khoon Hong had highlighted the difficulties faced by his competitors, with some banks trimming credit lines.
But the door on financing has not completely closed.
SingTel said last week that it had sealed about $1.075 billion in loans to refinance debt and for general working capital with banks here and in Australia, including DBS and OCBC.
SPH shares closed five cents down at $3.41 yesterday, with 6.8 million shares traded.