Malaysia may list some state-owned entities
Malaysia may list certain state-owned entities to cut government debt and liabilities, Prime Minister Mahathir Mohamad, said on Tuesday as it seeks new revenue sources to boost its fiscal position.
Mahathir, elected in a stunning upset in 2018, has blamed the previous administration of Najib Razak for saddling Malaysia with debt and liabilities of more than 245.52 billion dollars (1 trillion ringgit).
A government panel to cut debt is looking at strategies, such as “identification of opportunities on potential asset monetisation, which means mature unlisted government entities may be listed in the stock market,” he said.
State-linked companies could also have equity stakes, he told a conference of investors in Kuala Lumpur.
“The key guiding principles for monetising any of our assets is that the disposal or monetisation must never be done at fire-sale prices, and any disposal of shares, monetisation of assets, auctions or other measures will be done in an orderly manner.”
He did not, however, identify specific companies or fix a timeframe for the plan.
Sovereign wealth fund Khazanah Bhd, announced a new strategy this month, saying it was gearing up to be a “long-term real return provider” to the government through its commercial investments.
Some analysts have also speculated that the government could list a small portion of its stake in state energy firm Petronas to generate revenue.
Petronas is the sole manager of Malaysia’s oil and gas reserves.
Although some of its subsidiaries are listed on the national stock exchange, Petronas is fully owned by the government.
Finance Minister Lim Eng, said in 2018 the government had no immediate plan to sell stakes in state-owned companies, but did not rule out the possibility in the future.
Lim and Mahathir have blamed corruption scandals in the previous administration for Malaysia’s large debts.
The fiscal situation was also hurt after the new government scrapped an unpopular consumption tax, in line with a campaign promise.
Former premier Najib has been slammed with dozens of corruption charges since his defeat in May 2018, many related to alleged money laundering at state fund 1MDB.
He has pleaded not guilty and has consistently denied any wrongdoing.