KUALA LUMPUR: Lembaga Tabung Haji (TH) will transfer it’s underperforming assets worth RM19.9 billion to a Special Purpose Vehicle (SPV) to be owned by the government via the Ministry of Finance, as part of its turnaround plan.
The aforementioned assets will comprise a mix of properties with a yield less than 2% and equities with an impairment of more than 20%.
About 75%-80% of the assets will be in the form of equities while 20% will be properties.
In exchange for the assets the SPV would issue an RM10 billion seven-year sukuk – financial certificates, referred as “syariah compliant” bonds and RM9.9 billion of Islamic Redeemable Convertible Preference Shares (RCPS-i)
The pilgrim fund group’s managing director Datuk Seri Zukri Samat (pix) said no cash transactions or government guarantee on the sukuk will be involved in the asset transfer.
The sukuk will be non-traceable and fully subscribed by TH, as well as redeemable at any time without penalty.
“It is going to be a seven-year sukuk with a yield of 5%. Hopefully, seven years will be sufficient for the SPV to rehabilitate the assets,“ he added.
The transfer of asset and the consideration is to be completed by Dec 31, 2018.
One of the assets of the embattled organisation that will be transferred to the SPV is the land acquired from the 1Malaysia Development Bhd (1MDB).
Zukri also clarified that the 2017 financial statements were audited by the National Audit Department while Pricewaterhouse Cooper (PWC) was roped in to conduct an independent review on the financial position of TH.
TH will be supervised by Bank Negara Malaysia from Jan 1, 2019.
On Monday (11 Dec), Minister in the Prime Minister’s Department Datuk Seri Mujahid Yusof Rawa said auditing firm, PricewaterhouseCoopers (PwC) had proposed setting up a special purpose vehicle (SPV) to take over, rehabilitate and maximise the recovery of TH’s under-performing assets.
It was discovered in 2017 accounts, TH assets totalled RM70.3 billion while its liabilities stood at RM74.4 billion, a deficit of RM4.1 billion.
He added that TH will now come under the supervision of Bank Negara Malaysia starting in 2019, and a turnaround plan will be set in motion.
