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"We have a war chest of approximately US$5 billion"

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Oct. 20, 2008) – Rupert Murdoch warned yesterday that the world is "in the midst of an unprecedented credit crisis", but said his global media company, with a $US5 billion war chest, was well prepared to weather the financial storm.

The wily chairman of News Corp said the strength of his company’s balance sheet would allow it to pick up new businesses at a time when competitors struggle.

"We have a war chest of approximately $US5 billion in cash and have extended our average debt maturity to more than 22 years," Murdoch told News Corp shareholders at the company’s annual general meeting in New York. "In uncertain times, this capital reserve gives us stability. It also gives us the flexibility to take advantage of opportunities all around the globe that our competitors might not be in a position to act on right now."

Murdoch said News Corp had achieved its "sixth consecutive year of record earnings" and he had "great confidence" in the future.

However, the Melbourne-born 77-year-old admitted the financial crisis plaguing world markets posed an ominous dark cloud.

News Corp - which began half a century ago as an Australian newspaper business and has grown into a global multimedia empire including the 20th Century Fox movie studio, satellite TV operations in Europe, the No.1 TV network in the US, Fox, the Wall Street Journal and internet site MySpace - was prepared for the stormy financial climate, he said.

[PIR editor’s note: Media magnate Rupert Murdoch owns the PNG Post-Courier.]

"It is tempting of course to stand here and boast about our past year’s success," Murdoch said. "I cannot, however, do that. Not while we are in the midst of an unprecedented credit crisis that is exacerbating an economic downturn across the globe and has left no sector untouched, ours included. It has weakened advertising markets and beaten down our share price. We have prepared ourself well for this day.

"Debt preparation includes maintaining a strong balance sheet and a strategic array of businesses. As a result we are as well-positioned as we can be to face what may well turn into a prolonged economic downturn.

"Fiscal 2009 will be a year of many, and in some cases, unprecedented challenges. We cannot fool ourselves into believing otherwise."

News Corp will continue to re-evaluate its mix of businesses, but will look for acquisitions that provide new growth opportunities.

Murdoch said the company will "ensure we have the right balance geographically, the right balance across different business sectors and the right balance between advertising-supported and subscription-based businesses".

Key to the future were the emerging markets of "India, eastern Europe and Asia".

Murdoch said the regions feature more than two billion "well-educated, well-remunerated" people and will provide extraordinary new opportunities for News Corp.

"Despite turmoil in the markets and revolutionary changes that are transforming our sector, I have great confidence in our future," Murdoch told shareholders.

Murdoch, along with his sons Lachlan and James, Peter Chernin, Rod Eddington, Ken Cowley and other News Corp board members were re-elected.

PNG Post-Courier

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