GOVT ALLOCATES RM17.8 BILLION FOR TH
Underperforming assets to be transferred to firm under Finance Ministry, says TH MD
THE government is set to commit a maximum allocation of RM17.8 billion over 10 years for Tabung Haji (TH) as part of a rescue package.
TH group managing director and chief executive officer Datuk Seri Zukri Samat said the commitment was part of TH’s restructuring plan, which saw a transfer of underperforming assets to the government’s special purpose vehicle called Urusharta Jamaah Sdn Bhd (UJSB), owned by the Finance Ministry.
He said the transfer would be settled via RM19.6 billion sukuk and RM300 million in cash by UJSB or the government.
The underperforming assets had a book value of RM9.7 billion, but they were transferred to UJSB at RM19.9 billion to enable TH to cover the deficit of RM10.9 billion sitting on the balance sheet, he added.
Minister in the Prime Minister’s Department Datuk Seri Mujahid Yusof Rawa said the government would allocate RM500 million in 2020 and subsequently RM1.73 billion per year until all sukuk was redeemed.
“The government’s total allocation for the 10 years is estimated at RM17.8 billion,” he said here yesterday.
Zukri said the financial restructuring had enabled TH to close the deficit and restore the balance sheet to normal footing.
“We are confident TH’s performance will be better this year. With a stronger balance sheet and impairments out of the way, TH is on a stable footing to generate sustainable profits for hibah distribution in full compliance with the Tabung Haji Act 1995 (TH Act),” he said.
Up to Dec 31 last year, TH’s total assets stood at RM76.5 billion, in excess of liabilities of RM75.5 billion after the restructuring plan was carried out.
Income for the year was RM4.2 billion, while distributable profit was RM2 billion.
Despite the restructuring, TH had to recognise RM1.5 billion impairment, some of which should have been provided in the previous financial year.
Zukri said with the 2018 financial results meeting the two prerequisites — generate distributable profit and assets in excess of liabilities — TH could declare hibah in full compliance with the TH Act.
TH declared a hibah of 1.25 per cent, amounting to RM913 million, for depositors last year.
It was the lowest hibah paid in its history.