Saturday March 19, 2011
POS Malaysia’s divestment on track
BY RISEN JAYASEELAN
risen@thestar.com.my
Khazanah Nasional Bhd's divestment of its 32.21% stake in POS Malaysia Bhd seems to be going on track.
Sources say that five companies have submitted their bids for the Pos controlling stake, and that the names include DRB-Hicom Bhd, Scomi Group Bhd and Nationwide Express Courier Services Bhd.
Of the two other bidders, one is said to be backed by a government financial institution and the other is a small technology firm.
A number of potential bidders such as Singapore Post Ltd have disclosed that they are not bidding for Khazanah’s stake in Pos Malaysia.
The sale of the Pos controlling stake, however, is expected to have drawn a larger number of bidders. Names of potential bidders that had been bandied about in the past included the Naza Group, Sapura Holdings, the Berjaya Group, Konsortium Logistik Bhd's CEO Loo Hooi Keat and AirAsia Bhd group's CEO Datuk Seri Tony Fernandes.
Singapore Post Ltd disclosed that it was not bidding for Khazanah's stake in Pos.
According to insiders, all the bidders will be expected to present their plans for what they want to do with Pos by the end of the month. This presentation will be made to an independent evaluation panel.
Khazanah Nasional Bhd is divesting its stake in Pos and has hired CIMB Bank and an international consulting firm to manage the process.
Khazanah has said that the independent panel will comprise five professionals from the public and private sector “with extensive postal and corporate experience” and who would evaluate all bidders' proposal on an anonymous basis.
What is also clear is that all bidders have had to provide a standby letter of credit to the tune of RM15mil.
Khazanah has said in the past that contrary to speculation, there is neither a leading nor lagging bidder of the bid process.
What is also clear is that increasingly, the bidders for Khazanah's stake in Pos are comforted with the seemingly open and fair process.
Prior to the Tuesday closing date, bidders were provided with more information about Pos, including meetings with Pos' key management, in which bidders were allowed to pose questions.
Another aspect of the deal that will be watched closely by all interested parties is the new Postal Bill, expected to be tabled in Parliament soon. The legislation is likely to tackle crucial issues in Pos, including the Government's golden share and rights over some of the real estates owned by Pos.
In a recent research note, OSK Investment said the potential relaxation of the use of Pos's landbank under the purview of the Postal Bill appeared to be progressing well as the draft Bill would be tabled in Parliament some time this month.
It has been suggested that successful candidates to buy Khazanah's stake in Pos should not eventually load the postal company with huge debts or influence it to pay unreasonably high dividends.
Ideally, the party looking to buy Khazanah's 32.21% stake, that has a market value of close to RM550mil, should be able to raise that amount of money on its own, without having to rely on Pos' balance sheet.
The new shareholder should in fact, be looking to invest Pos' cashflows into the latter's growth plans. In other words, the buyer has to have a clear long-term, value-creation approach to Pos.
Pos has a healthy balance sheet, being in a net cash position and owning a lot of real estates.
Insiders also say that the divestment of the Pos stake will be completed by April 12, the date of Invest Malaysia 2011.
That deadline makes sense, considering that the Prime Minister had announced the divestment plan at last year's Invest Malaysia conference.