Fiji Television Limited has divested its 100 per cent shares in its Papua New Guinea-based subsidiary, Media Niugini Limited, to Telikom PNG for 27 million Kina (FJ$21 million).

The Sale and Purchase Agreement was signed yesterday at the Fijian Holdings Limited board room in Suva between Fiji TV directors and Telikom PNG.

FHL Group chief executive and Fiji TV director, Nouzab Fareed, said despite the sale and purchase agreement, it will take another 30 to 60 days for completion because of the number of regulatory approvals required.

Also, he said Fiji TV needs to hold an extraordinary general meeting in March to get the shareholders approval.

Mr Fareed said the sale had been a 16 months process and they had to go over a variety of stakeholders before selecting the right buyer.

Negotiation with Telikom PNG is understood to have started in October and finished on Wednesday evening.

Fiji Television, which has Fijian Holdings as its major shareholder now, bought Media Niugini Limited eight years ago with less than 60 staff members.

Today, the company employees more than 140 people whereby a lot of capacity building has been carried out by Fiji Television.

Mr Fareed said one of the reasons for their decision to sell Media Niugini was because of the competition which entered the PNG market the past year.

“Before it was only Media Niugini Limited which had 90 per cent of the share and suddenly, we had two more serious players entering,” he said.

“So when the competitors came in, we had two choices which was either to put in more money and defend our market position or give it to someone who can defend the market position.”

Media Niugini Limited has made has made profits for Fiji Television of about 4 million Kina (FJ$3.12 million) for the past four years, even more than Fiji TV itself.

But Mr Fareed said the last financial year had been a bit tough because of increasing competition and the need for the company to go digital as part of a requirement.

The estimated current financial year for Media Niugini is understood to be far below the average.

“This would have required us to put in more money and that is why we decided it is better for us to divest,” he said.

But Mr Fareed has stressed the exit of Fiji TV from PNG will not stop Fiji TV’s expansion in Pacific as they will continue to invest wherever they will see possibility of making money.

The selling price

Mr Fareed confirmed they consulted a lot of audit firms from Fiji and Papua New Guinea before the decision was made by the Fiji TV board to divest for FJ$21 million

At least four valuations were carried out for Media Niugini with the lowest valuation being 4 million Kina (FJ$3.12 million) and the highest 35 million Kina (FJ$27 million).

Mr Fareed said the average valuation was below 20 million Kina (FJ$15.6 million).

The net proceeds from the sale is expected to be distributed to shareholders of Fiji TV in the form of dividends.

However, Mr Fareed said the Fiji TV board will make a decision during the extraordinary general meeting.

Telikom PNG plans

Meanwhile, Telikom PNG group chief executive, Michael Donnelly, said from the organisation and Papua New Guinea’s point of view, this was an important acquisition.

“We have to acknowledge the business has been well-run and well-invested. It has grown significantly over the past five years,” he said.

But he acknowledged that media landscape in Papua New Guinea was changing dramatically especially with the introduction of digital competition.

Telikom PNG, a PNG state-owned enterprise, is looking at this acquisition as a mean to develop their own convergence strategy in the telecommunications industry.

“So we are very happy to have acquired this and we think it is good for our business,” he said.

Mr Donnelly confirmed their plans to invest in digital platform and more local content.

“We want to develop across our whole business platform a convergence strategy where both ICT and content is delivered as a single service to our customers,” he said.

“That is what makes this investment attractive for us. There is a convergence in the market.”

Feedback: rachnal@fijisun.com.fj