Khazanah still seeking strategic partner for SilTerra

KUALA LUMPUR: Khazanah Nasional Bhd, which expects its 20 largest government-linked companies' holdings to hit a record high of RM27.1 billion in net profit this year, is still looking for a strategic partner for its loss-making manufacturer of semiconductor wafers, SilTerra Malaysia Sdn Bhd.
Talk of selling either a stake or the entire company has been around since 2008.
According to Khazanah managing director Tan Sri Azman Mokhtar (pix), even though SilTerra has been mildly profitable, it still needs a strategic partner in the longer term.
"It could be business-to-business partnership without equity, or with equity ownership, we're looking at all options," he told a press conference at Invest Malaysia 2014 conference here yesterday.
"For the last nine to 10 years, from earnings before interest, tax, depreciation and amortisation (ebitda) standpoint, it (SilTerra) has been mildly profitable," Azman said, adding no new money will be put in to upgrade equipment at the company. Khazanah fully owns Silterra Malaysia.
Its latest accounts filed with the Companies Commission Malaysiashowed that the company's cash reserves were running at a loss of RM3.3 billion. For the financial year ended Dec 31, 2012, Silterra Malaysia made a net loss of RM256.7 million against RM 420 million revenue.
Its assets stood at RM381 million, while its liabilities were at RM2.6 billion. No company charges were listed in the document.
In February this year, Bernama reported that India's cabinet has approved the setting up of two semiconductor wafer fabrication manufacturing facilities in the country, one of which involved SilTerra Malaysia.
The report said HSMC Technologies India, ST Microelectronics and SilTerra Malaysia were to work on the US$4.66 billion (RM15 billion) project to be based in Gujarat. No update on the project was immediately available.
In a separate note, Khazanah said market capitalisation for G20 had tripled over the past 10 years to RM425 billion as of May 16, 2014 versus RM140 billion on May 14, 2004.
G20's net profit had grown at a compounded annual growth rate of 11.1% from 2004 to 2013, registering RM25.6 billion in 2013 alone. It's expected to reach a new high of RM27.1 billion.
G20 paid RM93 billion dividends and RM57 billion taxes in the same period.
Commenting on its deferment of the issuance of a RM2.4 billion exchangeable bond, Azman said the pullback was due to pricing issue.
"We want to make sure the deal is properly priced and structured," he said, adding that it will proceed with the fund raising exercise until market conditions become better.