The GLIC said to be in talks to sell 60% stake in M&S to Temasek and may also be looking to sell 50% in Pulau Indah Ventures

By MOHAMAD AZLAN JAAFAR / Graphic By TMR

Khazanah Nasional Bhd is believed to be in talks to dispose of its 60% stake in M+S Pte Ltd to joint-venture (JV) partner Temasek Holdings Pte Ltd, according to sources.

The possible disposal is part of the new federal administration’s move to get the government-linked investment company (GLIC) to shed non-related assets, capitalise on its investments and deliver a higher return to the owner.

The government, which is facing a financial crunch, spiralling debts and rising liabilities from the failings of its state-backed loans, needs to raise capital to finance the country’s expenditure.

A source said talks are already underway for the disposal of M+S to Temasek.

“The deal could give the government a hefty return on investment,” said the source, who declined to be named as talks are private.

Talks of stake sales could also include another JV company, Pulau Indah Ventures Sdn Bhd, a 50:50 JV between the two investment entities.

M+S was established in June 2011 as Khazanah pushed to be involved in property development instead of just being an equity holder.

The JV company plans to develop four land parcels in Marina South and two land parcels in Ophir-Rochor as part of the massive Marina One and DUO integrated developments.

The two joint projects have an estimated gross development value of S$11 billion (RM32.75 billion).

Khazanah and Temasek are also undertaking joint developments in Iskandar Malaysia through Pulau Indah Ventures.

The company is involved in the development of Afiniti Medini and Avira integrated wellness projects.

Tun Dr Mahathir Mohamad during a recent interview with The Malaysian Reserve said the government plans to dispose of stakes in its companies to plug the financial hole left by the previous administration.

The prime minister, however, said there is no plan to list Petroliam Nasional Bhd. The national oil company is the government’s crown jewel, delivering billions in dividends annually from the monetisation of its hydrocarbon resources.

Dr Mahathir said the administration is now evaluating companies which it owns directly or through GLICs like Khazanah.

“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,” said Dr Mahathir, who is also Khazanah’s chairman.

“We have some investments in this Iskandar (Malaysia) project. We also have some properties in Singapore and there are several other companies,” he said.

The Khazanah-Temasek JV to develop the Marina One and DUO developments came after Kuala Lumpur and Singapore agrees to a land swap deal in 2010.

Under the deal, Malaysia exchanged three plots of land formerly owned by the Malayan Railway and three additional plots in Bukit Timah for four land parcels in Marina South and two parcels in Ophir-Rochor.

The Malaysian land issue in Singapore and the water supply deal have been two major thorny issues between the two neighbours.