Thursday 28 Mar 2024
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KUALA LUMPUR (March 4): Khazanah Nasional Bhd is on the lookout for potential new strategic investments in Malaysia, in line with the call from the government to seek more contributions from government-linked companies (GLCs) and government-linked investment companies (GLICs) to grow the economy, particularly in the current climate.  

“The government is very keen to see how long-term investors like Khazanah can do their part to help spur investments in the sectors, bring about new industries and new entrants to come in, and maybe even partner with the private sector to do this,” said Khazanah managing director Datuk Shahril Ridza Ridzuan at the fund’s annual review today.

“And this is an important discussion that we need to have, as we think about investing for the long term for Malaysia’s future growth. That’s where we think about capital recycling, how we recycle capital from older assets into newer assets that can create economic growth and potentially new jobs,” he said. 

While keeping mum on the sort of sectors being explored, Shahril said: “We must think of investments, especially if you think about it strategically, as a tool to spur more economic growth.”  

“So if you are only buying and trading existing assets, I’m not sure if it adds any more growth to the market, other than inflating asset prices as you create demand for existing assets.  

“The approach that we are doing with the Ministry of Finance and other counterparts is to try and identify what sectors of the economy Malaysia should really pay attention to, in terms of expanding our investments and their roles in the economy,” he added. 

Last year, Finance Minister Tengku Zafrul Tengku Abdul Aziz pleaded for GLCs and GLICs not to slow down or postpone on domestic investments under the current economic situation, and instead to spend and invest more.  

Khazanah through its strategic fund invested some RM4.2 billion in the country last year, Shahril said during the annual review press conference. 

The sovereign wealth fund contributed RM2.2 billion to the government in the form of dividends, taxes and other contributions, he added. 

Mum on deals, Silterra ‘our focus right now’

Meanwhile, Shahril was mum about speculation over Khazanah’s potential divestment of its aquaculture outfit Blue Archipelago Bhd, and the potential listing of The Holstein Milk Co, which owns the Farm Fresh brand.

“We have not put anything together in terms of [Blue Archipelago]. Our focus right now is on Silterra (Silterra Malaysia Sdn Bhd). That’s one which we think will do better under entrepreneural management and ownership.

“Holstein Milk has been a huge success, and I think any question about listing is probably a bit premature. We believe this is a company which has a lot of potential for future growth, and which we think will continue to do well,” he said.

The Edge, quoting sources, reported in June last year that Blue Archipelago, which exports shrimps from its two farms in Kedah and Terengganu, is on sale with a price tag of around RM300 million.

In August, Bloomberg reported that Holstein Milk shareholders were deliberating a potential initial public offering with Khazanah seeking pre-IPO stake sale, although there was no certainty that the discussions will lead to a transaction.

Khazanah is said to have agreed to sell Silterra, which is part of its strategic fund, to a consortium led by Dagang NeXchange Bhd (DNeX), according to a filing by DNeX on Feb 8.

The Edge reported on Jan 11 that DNeX offered a total of RM470 million for the acquisition of a 100% stake in Silterra, in which it will hold 60%, and its partner Beijing CGP Investment Co Ltd the remaining 40%. The consortium is among four bidders eyeing the Kulim-based chip foundry, according to reports.

Shahril also touched briefly on UEM Sunrise Bhd, which had its proposed merger with Eco World Development Group Bhd called off by the latter in January. UEM Sunrise is 66.1%-owned by UEM Group Bhd, which itself is a unit of Khazanah.

“We are always seeing what value we can add to the companies under our portfolio. Mergers and acquisitions is one way to do so, organic growth and fixing of issues is another way.

“In light of the fact they have decided not to proceed with that, we are going to push them to focus on organic growth, as well as organic value creation for the company at this point,” Shahril said.

Read also:
Khazanah pledges support for restructuring of Malaysia Airlines 
Khazanah says it will no longer be sole shareholder of MAGB after debt restructuring 
Khazanah 2020 profit falls 61% to RM2.9b, declares RM2b dividend to government 

Edited ByS Kanagaraju
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