TM to move out from Menara Telekom

TM does not own the said building (Menara Telekom), and is not involved with its intended sale by the property’s owner, Menara ABS Bhd,” it said in a statement.

PETALING JAYA: Telekom Malaysia Bhd (TM) is planning to move out from the iconic Menara Telekom that has been put up for sale, and utilise its current buildings to optimise the relocation of its staff and operations.

TM said it was in the process of relocating the majority of its corporate offices into its TM-owned properties, including TM Annexe 1 and TM Annexe 2, as well as its properties in Cyberjaya as part of the company’s optimisation programme to enable greater efficiency and agility, and to accommodate hybrid working conditions.

“TM does not own the said building (Menara Telekom), and is not involved with its intended sale by the property’s owner, Menara ABS Bhd,” it said in a statement.

The telecommunications group clarified that it was merely a tenant of Menara TM, located on Jalan Pantai Baharu, Kuala Lumpur, and was not the owner of the building.

The buildings TM is planning to relocate to are TM Annexe 1 and TM Annexe 2, located next to Menara Telekom and owned by the telecommunications giant.

Yesterday, CBRE|WTW placed an advertisement in StarBiz for the sale of Menara Telekom in Lembah Pantai for an undisclosed amount.

It said the building was for sale by expression of interest, and the closing date for the first stage of the sale was on March 18.

The 55-storey building currently serves as the headquarters of TM, which is under a sale-and-leaseback agreement with Menara ABS, a special-purpose vehicle (SPV).

According to a statement by CBRE|WTW, there are four properties under Menara ABS that are held under a 15-year master lease agreement with TM. The four properties are Menara TM, TM Semarak (formerly known as Menara Celcom), TM Taman Desa and TM Cyberjaya.

“The properties form part of the portfolio of Islamic sale and leaseback transactions involved in the issuance of Islamic asset-backed sukuk ijarah (known as “ABS Fund”).

“The ABS sukuk-holders have signed a master ijarah agreement and invested in the ABS Fund, which is due to expire on Jan 15, 2023,” it said.

CBRE|WTW is also seeking potential investors to make a bid via tender for Menara TM Semarak and Wisma TM Taman Desa by March 31.

Menara ABS is an SPV set up back in 2008 to help TM raise RM1bil through an asset securitisation structure that essentially involves the sale and leaseback of four of its buildings.

Under Menara ABS, RM1bil was raised via three tranches – Tranche A, Tranche B and Tranche C.

According to Lembaga Tabung Haji (TH) in its 2019 annual report, the pilgrim fund held the entirety of Tranche C amounting to RM678.72mil. It is also an investor in Tranche A and Tranche B to the sum of RM101.38mil.

The other sukuk-holders are said to be the Employees Provident Fund and Retirement Fund Inc.

TH said under the terms of the transaction, the redemption of Tranche A amounting to RM345mil, on its expected maturity date of Jan 15, 2021, is to be met by Menara ABS through refinancing if TM opts for a lease extension, or via disposal proceeds if TM chooses to buy back all or any of the assets.

“If TM exercises neither alternative and decides to vacate and return the properties, AmanahRaya Trustee, the Securities Trustee, has the right to put the assets up for sale to ensure full and timely redemption of the Tranche A sukuk by its legal maturity date of Jan 13, 2023,” it said.

In July last year, RAM Ratings downgraded the rating of the RM345mil Tranche A sukuk under Menara ABS.

“We have also revised the outlook on the ratings to negative from stable. The rating downgrade reflects our concerns over the shorter time window to reach a resolution on lease negotiations and disposal of the underlying properties by the legal maturity date of the sukuk,” it said.

“Pursuant to TM’s decision to not exercise its right to buy back Menara TM, TM Semarak and TM Taman Desa, the issuer (on behalf of the sukuk-holders) in early June 2021 appointed real estate adviser, WTW Real Estate Sdn Bhd, to plan and drive asset leasing and process to dispose the unsold properties in the open market,” it added.