Deputy Minister in the Prime Minister’s Department in charge of religious affairs Ahmad Marzuk Shaary said the sale of THP’s assets would not resolve the company’s debt burden. Instead, he said, it would require a debt restructuring to manage the cash flow.
“Seventy-five percent of loans taken by THP are from (parent company) Tabung Haji. The important question here is what’s all the hurry in selling (THP’s subsidiaries) when commodity prices are in the recovery process.”
He said this in response to Noh Omar’s (BN-Tanjong Karang) questions on the justification for the asset sale as well as on the area and number of plantations being disposed of.
Marzuk said the decision to divest the 14 THP subsidiaries, which own a combined 76,957 hectares or 76.2% of the group’s land totalling 100,976ha as at Dec 31 last year, was made during the Pakatan Harapan (PH) administration in August 2019.
He said checks by the Prime Minister’s Department (Religious Affairs) found that four of the 14 subsidiaries were profitable: THP Ibok, THP Pelita Sadong, THP Pelita Gedong and Hydroflow.
According to THP’s 2019 annual report, as at Dec 31, 2019, THP Ibok owned 958ha in Terengganu, THP Pelita Sadong owned 4,567ha in Sarawak, THP Pelita Gedong owned 8,011ha in Sarawak, and Hydroflow had 5,583ha in Sarawak.
The decision to sell the plantations was made when palm oil prices saw a serious decline which led to the THP subsidiaries incurring losses.
According to Marzuk, PH’s action, which affected relations with China and India, led to a plunge in palm oil exports and prices.
On THP’s disposal of its 70% equity interest in THP-YT Plantation Sdn Bhd to TDM Bhd, a subsidiary of the Terengganu government, he said the RM7 million sale of THP-YT, which owns a total plantation land of 2,594ha in Terengganu, was being finalised with the transaction done at market price.
As part of the sale, TDM and THP agreed to the proposed settlement of part of the inter-company advances by THP-YT to THP Suria Mekar Sdn Bhd, a wholly-owned subsidiary of THP, amounting to RM78.68 million.
Also being finalised was the disposal of 100% of Bumi Suria Ventures Sdn Bhd and Maju Warisan Mas Sdn Bhd, which own 6,514ha in Sarawak, to non-Bumiputera company Tamaco Plantation Sdn Bhd, he said.
He said the RM170 million sale of the two companies was still at the Economic Planning Unit’s (EPU) approval consideration stage, as such sales to non-Bumiputera companies must get the EPU’s green light.
The sale of Bumi Suria Ventures and Maju Warisan Mas is being reviewed to determine whether it was done at market price and whether the divestment would impact THP’s long-term planning and profitability.
Marzuk said under the Perikatan Nasional-led government, investor confidence had improved and crude palm oil prices were recovering following a revival in international trade relations.
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