This article first appeared in The Edge Malaysia Weekly on March 9, 2026 - March 15, 2026

DIVERSIFIED conglomerate DRB Hicom Bhd (KL:DRBHCOM) is said to be mulling the privatisation of its 53.49% subsidiary Pos Malaysia Bhd (KL:POS), sources familiar with the matter tell The Edge.

It is understood that DRB Hicom, which is 55.92% controlled by businessman Tan Sri Syed Mokhtar Albukhary, has been looking to privatise the postal services operator for a while now, and may finally pull the trigger after years of speculation.

DRB Hicom did not respond to questions from The Edge about the possible privatisation.

One source familiar with Pos Malaysia and DRB Hicom put it aptly when he said, “This [talk of a privatisation] is cyclical.”

It is worth noting that similar plans emerged at this time last year but came to naught. Another source says he heard the privatisation plan has been gaining traction lately in the marketplace.

While Syed Mokhtar and DRB Hicom are understood to have been mulling their options, Pos Malaysia has been bleeding losses for seven straight years. For its financial year ended Dec 31, 2025 (FY2025), the company suffered a net loss of RM209.26 million on the back of RM1.84 billion in revenue. As at end-2025, it had accumulated losses of RM988.9 million.

For the period in review, it had RM53.02 million in deposits with licensed banks and RM86.72 million in cash and bank balances. On the other side of the balance sheet, it had RM433.22 million in short-term debt commitments and no long-term borrowings. The company’s shareholders’ funds stood at RM89.25 million as at Dec 31.

According to AskEdge, Pos Malaysia has a gearing ratio of 4.33 times, up from 1.5 times and 0.8 times as at end-FY2024 and FY2023 respectively.

Speaking on its prospects in a statement accompanying its financials, Pos Malaysia says its yields remain under pressure amid intense market competition, declining mail and retail footfall volumes, and regulatory issues such as parcel “masking” by major e-commerce platforms and “predatory” pricing, among others.

“While market conditions remain challenging, the group remains cautiously optimistic that its transformation efforts will drive steady improvement in FY2026,” Pos Malaysia says.

Late last month, the company announced it was looking to issue as much as RM1 billion in perpetual sukuk wakalah, the proceeds of which could be used for purposes including capital expenditure, financing of acquisitions or investments, refinancing of existing financing or existing borrowings, repayment of existing shareholders’ loans or advances.

At its close of 30 sen last Friday, Pos Malaysia had a market capitalisation of RM234.8 million. This means DRB Hicom would need to fork out at least RM109.2 million sans a premium, to buy out the remaining shareholders.

Other than DRB Hicom, Pos Malaysia has no other substantial shareholders, and its shareholding is fragmented. Nevertheless, the company is one of 32 in which the government has a golden share through the Minister of Finance Inc. This golden share gives the government the right to overrule any board decisions.

Mohd Fariszan Ahmad, a non-independent non-executive director of Pos Malaysia, is the deputy undersecretary, Strategic and Generic Sector (Government Investment Companies Division), at the Ministry of Finance, and is likely the government’s representative on the board.

In June 2011, DRB Hicom paid RM622.79 million, or RM3.60 per share, to acquire a 32.21% stake in Pos Malaysia from sovereign fund Khazanah Nasional Bhd.

In 2016, it injected KL Airport Services Sdn Bhd, Hicom Indungan Sdn Bhd and Hicom Engineering Sdn Bhd into Pos Malaysia for RM818.35 million, and bumped up its shareholding to the current level of 53.49%.

As at Dec 31, Pos Malaysia had total assets of RM1.95 billion. The company has a vast land bank, some of which is located in choice areas. According to its annual report for FY2025, the company has 46.84 acres in Sepang, Selangor, pegged at a net book value (NBV) of RM76.28 million; 9.91 acres in Pekan Hicom in Selangor with an NBV of RM71.07 million; and 2.7 acres in Brickfields, Kuala Lumpur, with an NBV of RM9.93 million, all with valuations as at Dec 31, 2024.

There are also choice parcels in Port Klang and Shah Alam in Selangor, and Ipoh, Perak, but it is understood that the bulk of its land bank is underutilised.

While Pos Malaysia may have land and other assets, the fact of the matter is that it is now at risk of falling into the Practice Note 17 category for cash-strapped companies, and requiring a restructuring.

DRB Hicom’s main businesses, other than postal services, include banking via a 70% stake in Bank Muamalat Bhd, defence, industrial property development, auto assembly and distribution.

For its financial year ended Dec 31, 2025, DRB Hicom chalked up a net profit of RM397.97 million on the back of RM17.31 billion in revenue. As at Dec 31, it had bank balances and cash deposits of RM2.74 billion. The company had long- and short-term borrowings of RM6.71 billion and RM1.64 billion respectively.

DRB Hicom closed last Friday at RM1.08 per share, translating into a market capitalisation of RM2.09 billion.

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