No plan to list Petronas because the govt does not want to lose control of the company

By MOHAMAD AZLAN JAAFAR, P PREM KUMAR & ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL

The government is about to dispose or reduce stakes in companies that it owns as part of efforts to plug the financial hole left by the previous administration, Prime Minister Tun Dr Mahathir Mohamad said.

The listing of Petroliam Nasional Bhd (Petronas), which had been mooted as a revenue-raising activity, however, is off the cards.

The Pakatan Harapan government, which secured Putrajaya after the May 9 general election, has said it inherited national debts and liabilities to the tune of RM1 trillion, which is more than 51% of the country’s gross domestic product.

With the abolition of the Goods and Services Tax, which had contributed a record RM44 billion to government revenues last year, Putrajaya needs other means to raise capital, maintain deficit targets and cut expenditure, but spur growth at the same time.

Dr Mahathir said the government is evaluating companies which it owns directly or through government-owned investment companies like Khazanah Nasional Bhd.

“We will look into the different companies. Some companies I think we have some shares which we can sell off. Some, which may be wholly owned by Khazanah, we may dispose of some percentage. And some, of course, we will just withdraw and sell off the company or even the assets of the company,” he told The Malaysian Reserve on Wednesday.

Dr Mahathir also said there is no plan to list Petronas because the government does not want to lose control of the company that is rated among the top petroleum companies in the world and deliver billions in dividend to the government annually.

“I think the thinking now is not to list Petronas, rather to look at its subsidiaries. Some of these companies are listed and if it is worthwhile, we will keep them. If we can reduce our holdings, we may,” said Dr Mahathir, who is also Khazanah chairman.

The sovereign wealth fund’s market capitalisation of its main 10 listed companies are valued at RM266.3 billion. The value does not include non-listed investments in property, entertainment and other portfolios.

These shareholding are largely inherited following the listing of state-owned enterprises like Tenaga Nasional Bhd, Telekom Malaysia Bhd, Malaysia Airports Holdings Bhd, CIMB Group Holdings Bhd and Axiata Group Bhd.

On the companies which could be candidates for disposal and stakes reduction, Dr Mahathir said: “We have some investments in this Iskandar (Malaysia) project. We also have some properties in Singapore and there are several other companies.”

He declined to elaborate due to the sensitivities of such information, but added that properties in Singapore could be likely candidates for disposal.

Dr Mahathir also did not dismiss the potential consolidation of some of the government-owned companies.

“That may be one of the ways. We need to get out of some of the businesses…where we see they are unable to manage, they are making losses. But even where they make money, perhaps the government might want to recoup some of the investment,” he said.

Khazanah and Temasek Holdings Pte Ltd have a joint-venture (JV) company, M+S Pte Ltd, which is owned 60:40 by Khazanah and Temasek respectively.

The company had delivered two joint development projects in Singapore — the Marina One and DUO — which have a total of S$11 billion (RM32.75 billion) in gross development value.

Khazanah and Temasek are also undertaking joint developments in Iskandar Malaysia through Pulau Indah Ventures Sdn Bhd, a 50:50 JV between the two investment entities. The company is involved in the development of Afiniti Medini and Avira integrated wellness projects.