BUSINESS

TH IDENTIFIES RM19.9 BILLION WORTH OF UNDERPERFORMING ASSETS FOR SPV

11/12/2018 06:12 PM

KUALA LUMPUR, Dec 11 (Bernama) -- Lembaga Tabung Haji (TH) has identified underperforming assets worth RM19.9 billion to be transferred to a special-purpose vehicle (SPV) owned by the Minister of Finance Incorporated (MoF Inc) to normalise its financial position, said Group Managing Director and Chief Executive Officer Datuk Seri Zukri Samat.

Of the identified assets, 80 per cent are equities with unrealised losses of more than 20 per cent, while the remaining 20 per cent are properties and land assets with yields of below 2.5 per cent, he said. 

The SPV will, in turn, issue a RM10 billion seven-year sukuk and RM9.9 billion of no maturity Islamic redeemable convertible preference shares (RCPS-i), redeemable at any time without penalty.  

 "The instruments will be issued in the first quarter of 2019," he told a press conference to unveil TH's rehabilitation and restructuring plan here today.

TH aims to complete the exercise by the end of this month, whereupon the pilgrimage fund will have a clean balance sheet with assets equal to liabilities, Zukri said, adding that TH has RM57.1 billion of good assets to-date.

Meanwhile, the company is also in the process of instituting a risk management framework to ensure that future investment policies will suit its new business model.

"We have hired a very experienced Head of Risk Management to ensure that we have a very robust evaluation process before we undertake new investments," he said, adding that TH is also reviewing its investments portfolio and may exit some sectors which are not doing well, such as oil and gas and the hotel business.     

Zukri said TH intends to review its asset allocation to reduce its exposure on equities to 20 per cent. 

It was reported that almost 40 per cent of TH’s assets comprised investment in shares of listed companies which were vulnerable to fluctuations of the financial market. 

With a restructured balance sheet, he said, TH will be poised to move forward to generate sustainable profits to distribute hibah (dividends) and it will be in full compliance with the Tabung Haji Act 1995. 

It will also be able to pay a sound dividend this year, he said, adding that he is confident the company will be back on track in 2019.

He also clarified that the pilgrimage fund was audited by the National Audit Department, not PriceWaterhouseCoopers (PwC) as reported, saying that PwC only reviewed TH’s financial position to establish its true financial position as at December 2017 because of the “emphasis of matter” raised by the Auditor General. 

Zukri also assured that the cost of performing the hajj will remain at RM9,980 per pilgrim in 2019.

-- BERNAMA


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