KHAZANAH Nasional Bhd’s move to reduce its stake in IHH Healthcare Bhd is more than the sovereign wealth fund losing its status as the single-largest shareholder in the giant healthcare company.
It marks the end of the Khazanah–led government-linked company (GLC) transformation programme, which started in 2005. It also is the start of Khazanah version 3.0.
Some 13 years ago, the push for transformation among GLCs came from the government. It ended up with the emergence of Khazanah version 2.0.
An integral part of the transformation journey is Khazanah identifying and nurturing companies that are able to compete and operate outside Malaysian shores. On that score, IHH sprouted up and grew to become the second-largest listed healthcare service provider in Asia.
Apart from IHH, Khazanah’s regional beacons of hope included Axiata Group Bhd and CIMB Group Holdings Bhd .
The companies are different from the old businesses that were already in the national sovereign fund before the transformation. The older companies are the likes of Telekom Malaysia Bhd (TM) and Tenaga Nasional Bhd (TNB) that are in the traditional brick-and-mortar business.
An exception was Time dotCom Bhd , where Khazanah ended up with a stake in after its listing in 2000.
In 2002/2003 when Khazanah took over the Renong/UEM group as part of the government’s efforts to rebuild corporate Malaysia, its stable of companies in traditional businesses increased to include Plus Expressways Bhd, Cement Industries Malaysia Bhd and UEM Edgenta Bhd – a facilities maintenance operator.
The older businesses are generally focused on the domestic market, operate in a regulated environment and need to fulfil the government’s social agenda of helping bumiputra entrepreneurs as well as individuals with potential.
“This is how Khazanah became a major source of employment for young and bright talent,” says an executive familiar with the workings of Khazanah.
Companies likely to see changes in shareholding
Khazanah stands to make a pile from IHH stake sale