Pengurusan Danaharta Nasional Bhd is confident of redeeming its RM11.14bil of outstanding bonds maturing between this December and March 2005.
Managing director Zukri Samat said based on the national asset management company's cash position of RM7.09bil at June 30, it was already able to redeem five tranches of bond issues maturing up to March 31, 2004.
He told a press briefing in Kuala Lumpur yesterday on Danaharta's operations for the six months to June 30 that the agency had also fully repaid ahead of schedule its RM1.3bil loans from Khazanah Nasional Bhd and the Employees Provident Fund (EPF).
Danaharta had taken the loans for working capital purposes. With the direct loans extinguished, its outstanding liabilities and capital have been reduced to RM14.14bil, comprising RM3bil of initial capital and RM11.14bil of bonds.
“We are pleased to have fully repaid our direct loans. Our next challenge is to redeem all the bonds issued. Looking at our cash position and the recovery we are expecting to make, we are confident of achieving full redemption,'' Zukri said.
Danaharta, set up by the government in 1998 to avert a banking crisis, had issued 15 tranches of zero-coupon bonds with a total face value of RM11.4bil to financial institutions that had sold their non-performing loans (NPLs) to the agency. The first tranche matures on Dec 31 this year.
As of June 30, Danaharta had reviewed and identified recovery strategies for all the NPLs in its portfolio. The company expects to recover, over its life span, RM30.42bil or 58% of its total adjusted loans rights acquired (LRA) NPL portfolio of RM52.3bil.
Zukri said to date Danaharta had received RM22.13bil or approximately 73% of the total recovery expected. The balance RM8.29bil was still pending implementation of the respected recovery strategies identified, and would be collected over time, he added.
Danaharta receives its recovery in the form of cash and non-cash assets, mainly as restructured loans, securities and properties. Of the RM22.13bil received, some RM17.25bil (including adjustments) have been converted to cash.
Part of the cash generated from recovery operations was distributed to the government and various financial institutions.
As of June 30, gross proceeds of RM12.16bil from the recovery of Bank Bumiputra Malaysia Bhd group's and the Sime Bank group's NPLs had been distributed to the government after deducting management expenses. The NPLs were managed by Danaharta on behalf of the government.
Zukri said Danaharta's huge holding cost and surplus sharing agreement could mean it would not be making money, adding that, as with other asset management companies around the world, Danaharta was not set up with the objective of making profits.
For the first half to June this year, the average default rate had declined to 3.9%, versus 6.4% in the six months to Dec 31 last year. The expected recovery rate rose slightly to 58% from 57%.
During the period, 267 borrowers fully settled loans amounting to RM6.68bil. This compares with 571borrowers settling loan totalling RM13.3bil as of June 30.
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