KUALA LUMPUR Dec 28 - Telekom Malaysia’s decision to terminate most of its tenancy at its headquarters in Bangsar, Kuala Lumpur will result in significant losses to Menara ABS sukuk holders which includes investment institutions like the Employees Provident Fund and Lembaga Tabung Haji.
Sources said it is estimated that the losses could run up to hundreds of millions of ringgit and this will have an impact on the members of EPF as well as depositors of TH, which manages the funds for those wishing to do their pilgrimage in Mecca.
“EPF may not be so affected because it is not a big investment for them but this will have an impact on TH and its 8 million depositors,” said a sukuk industry source.
To recap, many were surprised earlier this year when the iconic Menara TM was put up for sale with numerous newspapers running the ad.
Many did not know then that the tower did not belong to the telecommunications giant after all.
TM and its group of companies will only lease about 10 percent of the office space at Menara TM, a huge drop from 70 per cent previously.
EPF and TH’s investment in Menara ABS sukuk in 2008 was a landmark event for TM which was looking to raise funds for its High-Speed Broadband project which is known as Unifi today.
TM was able to raise about RM1 billion for the HSBB project from the issuance of the Menara ABS sukuk, which was securitized against property assets like Menara TM and a few other properties.
However, as the sukuk is about to reach its maturity next year, TM has had a change of heart and made the decision not to buy back the properties under Menara ABS sukuk.
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To make matters worse, it decided to move from its own HQ.
These decisions will result in losses for the country’s investment institutions at a time when the investment environment remains challenging.
On the flip side however, TM recently announced its nine-month net profit jumped more than 20 per cent to RM983.1 million for the period to 30 September 2022.
TM officials could not be reached for comments. - DagangNews.com
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