PLANNED DIVESTMENTS: Photo shows the skyline of Kuala Lumpur. A divestment strategy to pare down GLIC’s holdings involves 33 GLCs held by six GLICs: lowering stakes in five GLCs, listing of seven GLCs and the outright sale of 21 GLCs. — Bloomberg photo
KUCHING: The Economic Transformation Programme (ETP) Annual Report 2012 has highlighted the completion of 15 government linked company (GLC) divestments out of a total 33 identified under the government’s Strategic Reform Initiative (SRI) to rationalise its role in business.
The Government’s Role in Business SRI introduced in July 2011, seeks a clear separation of the government’s role in regulatory and business functions to avoid crowding out the private sector, raise liquidity in the capital market and improve the government’s fiscal position.
A divestment strategy was put in place to pare down government linked investment companies’ (GLIC) holdings. For a start, the plan involves 33 GLCs held by six GLICs: lowering stakes in five GLCs, listing of seven GLCs and the outright sale of 21 GLCs.
A total of 24 GLCs had been identified for divestments in 2011-12. To date, 15 out of the total 24 divestments identified for 2011-12 had been completed with 11 divestments completed in 2011 and another four in 2012.
Some of the reasons for the shortfall are the GLCs themselves not being successful in reaching their ‘strike price’ which had been identified earlier for their divestments, low valuations leading to low selling/divestment prices and uncertainties in the broader market which impacted pricing.
Maybank Investment Bank Bhd (Maybank IB) in a report yesterday expected the divestment programme to gather pace after the 13th general election (13GE), depending on the latter’s outcome and opined that GLC divestments could be a thematic then.