Not ‘pushing the envelope’

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POTENTIAL WINNER: Azman (left), seen here sitting next to Rashdan, discloses that Khazanah already has a winning candidate in mind with regard to the divestment of its 32.21-per cent stake in Pos Malaysia.

Khazanah MD sheds a little light on divestment of shares in Pos M’sia

KUALA LUMPUR: ‘We are unable to announce just as yet’ was the initial remark made by Khazanah Nasional Bhd’s (Khazanah) managing director Tan Sri Azman Mokhtar at the start of a press conference held at the sidelines of the second-day Invest Malaysia 2011 Conference here yesterday.

“Of course, I believe that one issue has been playing on your minds all this time,” he joked with reporters here.

Notably, the managing director was referring to Khazanah’s divestment of its shares in national postal company Pos Malaysia Bhd (Pos Malaysia), which had been under a slew of speculations with regards to potential bidders for the divestiture.

Newsflow had circulated earlier that Prime Minister Datuk Seri Najib Tun Razak would announce the winning bidder of Khazanah’s 32.21 per cent stake in Pos Malaysia on Tuesday at the opening of Invest Malaysia 2011 – one year after the announcement of Khazanah’s divestment plans at the previous Invest Malaysia.

So far, no names had been disclosed. On Khazanah’s side, the conglomerate had just officiated its invitation for bids on Pos Malaysia through advisor CIMB Investment Bank Bhd in January this year.

Amongst the requirements stated were that all bidders must be 51-per cent owned and controlled by Malaysians, with a profile that would fit the objective of diversity in terms of ownership – including Bumiputera participation.

“I cannot pre-empt the (Khazanah) board,” Azman told reporters. “Basically at the management board, we have performed our tasks and will be submitting to the board within this month.

“Only after that, we will be able to make the announcement.”

In a Reuters report late March, Khazanah was reported to have shortlisted three local firms to buy its stake in Pos Malaysia; namely DRB-HICOM , Nationwide Express Courier Services Bhd as well as a joint-venture between Amanah REIT and Malaysia Pacific Corp.

“Some of the things reported were accurate; but others were totally wrong,” stressed Azman.

Further, Khazanah’s executive director for investments Mohammed Rashdan Mohd Yusof outlined the bidding process where as a start, Khazanah was ‘casting the net as wide as possible’.

“All interests were given full attention by us, then we had them streamlined and shortlisted to what we call an ‘indicative bid process’ that started early this year.

“Thenceforth, we have set up an independent panel comprising five individuals, some of whom have wide, extensive and international postal experience. From the feedbacks that we’ve received from the bidders themselves that they were given every chance and equal opportunities to put their best foot forward to win the bid.

“Certainly, we can guide you along the bidding process; but certainly not the identities of the bidders as yet,” explained Rashdan, to which Azman concurred by saying “well put”.

Nevertheless, a rain of questions that followed Azman’s statement indicated that the response was not adequately satisfactory.

In view of this, Azman somewhat relented – even if a little bit – by which, he elaborated that Khazanah had approached close to 50 potential buyers with regards to the said corporate exercise.

“What we are looking for is that the winning bidder should be have strategies that are slated towards unlocking the economic values of Pos Malaysia and its 700 sites around the country. At the same time, they have to be in accord with the global postal services requirements.

“As the major shareholder, we are looking at the financial value. Of course we are looking at the best premium relating to the bidding offer.”

Reuters previously reported these shortlisted firms had bid between 2.2 to three times of Pos Malaysia’s book value per share, which stood at RM1.54 ringgit at the end of last year. In value, Khazanah’s stake in the postal firm was estimated at around RM574 million.

As a ‘sweetener’, Azman disclosed to reporters that Khazanah already had a winning candidate in mind.

“Of course, the shortlisted candidates had been narrowed down further, all of whom are ready to commit to the exercise. The decision, however, is still subject to Khazanah’s board,” he stated, still maintaining his responses within the bracket of confidentiality.

Nevertheless, Azman underlined that the ‘part and parcel’ of the whole exercise on Pos Malaysia was in line with the Prime Minister’s announcement in Invest Malaysia last year, urging for the acceleration of divestments of government-linked companies such as Pos Malaysia.

“We subscribe to the notion that for a thing that has not moved for a long period of time, it will stagnate and eventually die. For Pos Malaysia, the postage tariff has moved after a lull of 15 years. Thereafter, we saw the resolvement of the long-running issue relating to the salary of postmen. This was very fast-paced, if benchmarked with other similar transactions.

“We are almost there,” added Azman.