PNB ready to give financial aid
Fund manager to support underperforming ‘core companies’
KUALA LUMPUR: Permodalan Nasional Bhd (PNB), which manages RM288.1bil in assets, has signalled its intention to provide financial support to underperforming “core companies” seeking to turn around their business.
“We started effectively with support in the participation of Sapura Energy Bhd’s transformation exercise, which we believe if executed well will deliver very positive results in the future,” said president and group chief executive officer Datuk Abdul Rahman Ahmad to reporters after the launch of PNB’s new unit trust products.
Sapura Energy had in late August announced a RM4bil cash call to shore up its financial position and capital structure. PNB is the second-largest shareholder in Sapura Energy, owning about 12%.
The fund has given its undertaking to subscribe to its portion of the rights shares, as well as to take up any excess rights shares. Sapura Energy, earlier this week, requested for a waiver for PNB from making a mandatory general offer if its shareholding in the company breached the 33% threshold after the completion of the rights issue exercise.
“We understand the external challenges that they are facing... so our focus now is to engage with them,” Abdul Rahman said.
At the press conference yesterday, Abdul Rahman explained that the “core companies” are companies which PNB has more than a 10% stake in, or exposure of above RM1bil.
He pointed out that some of the stocks’ per- formance year-to-date has been lagging, including Telekom Malaysia Bhd, Axiata Group Bhd and some construction companies.
“Our focus earlier last year was on our strategic companies, so now, we are moving towards our core companies,” he said.
Last year, under the stewardship of Abdul Rahman and former PNB chairman Tan Sri Wahid Omar, PNB had embarked on an overhaul of its strategic companies, which it has controlling stakes in. These exercises included the demerger of conglomerate Sime Darby Bhd into three separate listed companies, UMW Holdings Bhd from UMW Oil & Gas Corp Bhd, and the decoupling of Chemical Company of Malaysia Bhd (CCM) and CCM Duopharma Biotech Bhd, delivered in terms of returns to shareholders.
PNB also oversaw the acquisition of I&P Bhd by SP Setia Bhd. With a new chairman – Tan Sri Zeti Akhtar Aziz – on board, the fund is moving into phase two of its transformation. The former Bank Negara governor said the fund would focus on consolidating its previous exercise.
“There is going to be a period of consolidation. Of course, we don’t exclude any market-driven merger or demerger exercise, but not precipitated by PNB,” she said.
Zeti came in as the chairman of PNB in July. In less than two months in office, she said that PNB is set to take on a transformation programme within the organisation and its investments.
“We need to increase our capability in risk management... and we also need to build buffers because there would be a time when there would be setbacks because the environ- ment is beyond our control,” she said yesterday.
Despite the volatility in the stock market since the beginning of the year, PNB recorded a 7.3% increase in its asset under management to RM288.1bil as at Aug 31, compared to RM268.6bil a year ago. Its net income for the first eight months of 2018 rose 2.6% year-onyear to RM10.3bil. As at August 2018, PNB had 13.6 million accounts with 231.5 billion units in circulation. Cumulative income distribution stood at RM176.4bil as at September, including RM4.3bil distributed year-to-date.
“PNB has achieved an encouraging performance, especially given the challenging global and domestic environment,” Zeti said.
She pointed out that PNB is also focusing on introducing more variable pricing unit trust products, moving forward.
Yesterday, the firm launched two new variable pricing unit trust funds under Amanah Saham Nasional Bhd, namely, ASN Equity 5 and ASN Sara 2. The two funds will be offered under the variable pricing unit trust, which means the performance of the unit trust will depend on the investment portfolio. “The previous variable fund launch was 15 years ago. These variable funds are available to all Malaysians,” Zeti said.
PNB also announced an income distribution of six sen per unit for Amanah Saham 1Malaysia, which will be renamed as Amanah Saham Malaysia 3 effective Oct 15. The income distribution will involve a total payout of RM755mil, which is 5.5% higher than 2017’s payout, benefiting more than 440,000 account holders who currently own 12.7 billion units.