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RM5b injection not to repay Valuecap's debts, says Nor Mohammed |
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Posted by admin
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Tuesday, 11 November 2008 20:38 |
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(The Sun) The RM5 billion to be injected into Valuecap Sdn Bhd by the Employees Provident Fund (EPF) will not be used to repay its RM5.1 billion debt due in February, Second Finance Minister Tan Sri Nor Mohamed Yakcop said.
 | | Tan Sri Nor Mohamed
Yakcop | Winding-up Budget 2009 at the committee stage, he said ValueCap's main shareholders - Khazanah Nasional Bhd, Permodalan Nasional Bhd (PNB) and Pensions Trust Fund Council (KWAP) - have agreed to refinance the loan.
"So far, ValueCap had been able to pay off all its loan interests within the stipulated duration and at the same time, it had also been capable of paying dividends to its shareholders,” he told the Dewan Rakyat today.
Khairy Jamaludin (BN-Rembau) had raised the issue in his debate while Tony Pua (PJ-Utara) had said according to documents from the Securities Commission, ValueCap had issued bonds on Feb 28, 2003, which would mature three years from the date of issuance and can be extended for another three years, as allowed in the terms of the bond in 2006.
To the points raised by Datuk Dr Marcus Mojigoh (BN-Putatan), Saifuddin Nasution Ismail (PKR-Machang) and Lim Kit Siang (DAP-Ipoh Timur), Nor Mohamed said the RM5 billion injection does not involve any risks to EPF contributors.
"It is guaranteed 100% by the government. ValueCap will use the fund to invest in companies whose share prices are low but have strong fundamentals and potentials.This is a good time for ValueCap to invest, being a long-term investor,” he said.
To Azmin Ali’s (PKR-Gombak) comparison that the injection is less effective to generate growth as opposed to direct injection into the real economy as being done by the US and China, Nor Mohamed admitted that investments into real economy is important and the government has announced several initiatives to achieve this objective.
"At the same time, EPF has a role to channel its funds to support investments in real economy. This is part of its mandate. For example, through bond holdings offered by the corporate sector," he said.
He said banks were unable to finance the projects that need huge funds and with long gestation periods because bank financings are for short term, therefore the role of EPF in this issue is important.
"However, it does not mean that EPF must focus only on real economy and not on the capital market. By lending RM5 billion to ValueCap, it does not mean EPF’s funding in real economy will be affected because it has funds exceeding RM330 billion," he added.
On the High Speed Broad Band (HSBB) project, Nor Mohamed said it has been awarded to Telekom Malaysia through direct negotiation because at the moment, TM provides 85% of the country’s broadband services and possesses the necessary infrastructure.
"TM is experienced in the broadband field, having invested more than RM4 billion before," he added.
At the same time, he said, TM has been instructed to carry out all its procurements through open tender in order to provide opportunities to capable companies and cut down implementation costs.
"The HSBB project has a big impact on the country in terms of enhancing its competitive level and has apparent economic spin-offs. However, it would not be commercially competent without the government's support to facilitate it.
"This is an example of a good private-public partnership," he said, adding the government believes TM was a good choice to implement the project efficiently and effectively and at reasonable costs.
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