KUALA LUMPUR: The Ministry of Finance would be taking up RM19.9bil of Lembaga Tabung Haji’s (TH) underperforming assets comprising equities and properties.
Group managing director and chief executive officer Datuk Seri Zukri Samat said the assets would be transferred to a special purpose vehicle (SPV), which will be owned by the government.
“The assets to be carved out would be identified using two criteria, for properties would be those with a yield of less than 2% and for equities, the value impaired would have exceeded 20%,” he told reporters at a press conference at TH’s headquarters on Tuesday.
The exercise is to rehabilitate the pilgrimage fund’s underperforming assets and normalise its financial position.
Zukri highlighted among the assets that would be carved out include its 1MDB land it bought for RM195mil and its stakes in oil and gas (O&G) companies.
“The land is not churning any yields…and we are not so good in O&G and hotel businesses,” he said.
The transaction is expected to be completed in three weeks, he added.
The SPV, he said, would be issuing RM10bil sukuk and RM9.9bil in Islamic redeemable convertible preference shares (RCPS-i).
The Sukuk would have seven-year maturity with zero-coupon to be issued at discounts yielding 5% per annum.
Meanwhile, the RCPS do not have maturity date and dividend.
Zukri pointed out that there would be no cash transaction involved between the SPV and TH.
“We believe that seven years should be enough for assets turn around,” he said.
Upon completion, he said TH would have a clean balance sheet with assets equal to liabilities at RM77bil.