KUALA LUMPUR (Oct 9): The Armed Forces Fund Board (LTAT) has to proceed with the buyout of Boustead Plantations Bhd (BPlant) even after the proposed stake purchase by Kuala Lumpur Kepong Bhd (KLK) fell through, to safeguard the interest of the plantation group’s shareholders as well as to protect LTAT from potential legal action, according to Defence Minister Datuk Seri Mohamad Hasan.
Another reason why LTAT proceeded with the general offer of RM1.55 per share by itself was to "uphold order", Mohamad Hassan told a press conference in Parliament on Monday.
“We made our choice on the company’s basis and we chose the best by inking a strategic collaboration agreement (SCA) with KLK.
“But because of various other considerations — many in Dewan Rakyat wanted to bring down the ceiling, [but] we didn’t want that, we wanted to make sure the Parliament building was intact — we took a different route,” he said when asked if it was Bumiputera consideration that caused the deal with KLK to be shelved.
And if LTAT didn't proceed with the general offer after the termination of the SCA, it could face legal action, he added.
Under the SCA, KLK was to acquire a 33% stake plus one share in BPlant from LTAT and Boustead Holdings Bhd for a cumulative RM1.15 billion, then proceeding to extend a mandatory general offer at RM1.55 per share or RM1.11 billion in total to privatise the plantation group, which would result in KLK controlling a 65% stake, and LTAT the other 35%.
But after the SCA was inked, various Opposition MPs opposed the deal, saying it was not in line with the government’s aim of achieving the Bumiputera corporate equity target of 30% by 2025, based on the 12th Malaysia Plan.
On the same day that the KLK deal fell through, LTAT stepped in to take over BPlant's privatisation at the same price of RM1.55 per share.
Pendang MP Datuk Awang Hashim ― one of the MPs who previously objected to the KLK deal ― had said LTAT should have upheld its “Bumiputera mandate” and selected a Bumiputera entity from among the lower bidders.
Mohamad rebutted this idea, saying “when we are in the corporate world, do not mix political and corporate issues”.
“Earlier, Pendang asked ‘Why not give it to the lower bidder?’. I think that is not good corporate governance practice for a company. If you did that, how would you explain your actions in Dewan Rakyat?” he asked.
Nonetheless, Mohamad said LTAT is still going to be offloading BPlant, in a sense, but by way of parcelling out its lands to realise their value, as it eyes “higher returns” for its contributors — members of the armed forces.
“[BPlant has] an estate in Bangan, surrounded by an industrial area. We can convert it into an industrial lot and parcel it out, realising its value,” he said.
From LTAT’s portfolio that holds 20% liquid assets, Mohamad Hassan said the board targets to increase the liquid-asset portion to 60% ― in its shift from an investment fund to a retirement fund.
BPlant shares closed one sen or 0.72% higher to RM1.40 on Monday, valuing the group at RM3.14 billion.
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