THE grand plan of Permodalan Nasional Bhd (PNB) to create the biggest property and plantation companies on the MSEB has begun to take shape with the formalisation of the assets swap between Island & Peninsular Bhd (I&P) and Golden Hope Plantations Bhd (GHope).
Even though labelled as “hasty” and “lacking focus” when first announced six months ago, the deal's formalisation has silenced the critics and proven the seriousness of PNB and the Government in realising the plan, which will include Kumpulan Guthrie Bhd at a later stage.
And what a grand plan it is, considering that it sacrificed a general (Tan Sri Khalid Ibrahim) for a smooth execution of the war.
Khalid was the chief executive officer of Guthrie for more than 10 years until he was replaced by Datuk Wahab Maskan, the former group chief executive of GHope.
Khalid was no ordinary general. He had helped turn PNB into a fortress of bumiputra funds during his tenure as CEO in the 1980s.
He was also part of the team that worked with the late Tun Ismail Ali, then the central bank governor and later PNB chairman, to bring Guthrie home in the famous “dawn raid” on the London Stock Exchange in 1982.
So what can we expect from the merger of I&P and GHope?
The merger aims to create two formidable players in their own fields – property and plantations; each owning thousands of acres of land, each having an efficient management with proven record and expertise in its field, and each being able to stir investor interest.
At a media briefing on Friday, I&P managing director Dr Radzuan Abdul Rahman said the company would end up with 19,000 acres of land-bank; it currently has 3,000 acres.
A close look shows the promising ones that could be developed in the next five years would be the 1,388-acre Haron Estate in Shah Alam, Selangor, and some 500 acres in Cheras (Selangor) and Bukit Jalil (Kuala Lumpur).
The bulk of the land acquired from GHope is sited in Nilai in Negri Sembilan, and Kajang and Klang in Selangor, with parcels in Morib in Selangor, Paroi in Negri Sembilan, Kulai in Johor, and Sitiawan in Perak.
Dr Radzuan said about 10 companies had approached I&P for collaboration or joint ventures. This, GHope had been doing all this while, as well as inviting parties for outright sale.
In addition, Dr Radzuan said, foreign investors were keen on I&P and had been making “visits to the company headquarters almost every week” to gain insights into what the merged entity had to offer.
Portfolio funds currently hold less than 5% in I&P, and it looks like the figure would inch up further in the weeks to come.
But portfolio funds and the excitement they create on the MSEB are not exactly what the PNB and the Government are after. Rather, the catch is the foreign strategic investor that will pour billions of ringgit into the country.
Sources said PNB was preparing to offer stakes in the merged entity to foreign funds looking for new opportunities.
Also, PNB chief executive officer Datuk Hamad Kama Piah Che Othman had recently said that PNB would consider selling a strategic stake in its holdings if the price were right.
Upon completion of the I&P-GHope merger, PNB will still remain the largest shareholder of I&P with 60%.
The Employees Provident Fund and Bank Negara will hold 7% each in I&P, and the balance 26% will make up the free float.
PNB will also be the largest shareholder, with 59%, in GHope after the merger.
PNB's move to have trusted generals in each of the companies shows its strong determination to push through its grand plan.
All three companies slated for the merger, I&P, GHope and Guthrie, are helmed by personalities close to PNB chairman Tan Sri Ahmad Sarji Abdul Hamid.