Debts hit $143 mil
KUALA LUMPUR — Malaysian network TV3 is being restructured to reduce its crippling debt — and the rejig can’t happen quickly enough for U.S. distribs who have been waiting 12-18 months to collect license fees.
Viewers have felt the impact of TV3’s financial woes as the web cut back on expensive U.S. features and bumped up reruns of local dramas.
Company is saddled with debts of $143 million, a legacy of heavy borrowings during the economic downturn of the late 1990s and costly diversification into other areas such as film production.
TV3 also has suffered an erosion of urban upscale viewers, lured away by competitor NTV7.
The restructure aims to cut borrowing to $33.2 million and should be complete by February, according to chief operating officer Azliza Ahmad Tajuddin.
Cost-cutting, which has yet to include layoffs, helped TV3 reduce pre-tax losses for the nine months ended May 31 to $2.24 million, from $5.8 million in the same period for 1999-2000.
Azliza says: “The company still buys locally produced dramas, but with the tight budget we have to be selective. We have also reduced buying foreign films, but many of the Bollywood and Kung Fu movies we screen are sponsored.”
If the restructuring goes as planned, Malaysian Resources Corp. (MRC), which owns 49% of TV3, will have its stake shaved to 20.8%, and Simpletech, headed by tycoon Mohd Ibrahim Mohd Noor, will become the largest shareholder with 21.1%. MRC is headed by businessman Abdul Rahman Maidin and has close links to government leaders.