KUALA LUMPUR (July 22): The asset rationalisation exercise of TH Plantations Bhd (THP) was aimed at making the company reemerge as a viable medium-sized plantation player, said Parit Buntar MP Datuk Seri Dr Mujahid Yusof.

Mujahid, a former Minister in the Prime Minister’s Department, said the asset rationaliisation of the company, in which Lembaga Tabung Haji (LTH) owns a 73.84 percent stake, involved the sale of some of its loss-making plantation land.

The sale was not done blindly, but was closely planned and implemented with the aim of strengthening the financial position of a company constrained by high debt burdens, he said in a statement today.

He said Bumi Suria Ventures Sdn Bhd and Maju Warisanmas Sdn Bhd were sold to Tamaco Plantation Sdn Bhd for a combined RM170 million in 2019 to ease THP’s debt burden.

After the sale was completed, THP was able to improve its gearing ratio to 0.94 times from 1.09 times and cut its loan costs by RM9.41 million a year, he said.

Earlier, Deputy Minister in the Prime Minister’s Department (Religious Affairs) Ahmad Marzuk Shaary said the Government is not discounting the possibility of cancelling the sale of THP’s assets as many issues have had to be re-examined, stressing that the asset sale would not reduce the debt burden of THP, which he said needs to restructure its debts to improve its cash flow.

"The important question here is why the rush to sell (THP’s subsidiaries) since the recovery of commodity prices is the main instrument of TH Plantations,” he said during a question-and answer session at the Dewan Rakyat today.

Meanwhile, Arau MP Datuk Seri Shahidan Kassim called for a Royal Commission of Inquiry (RCI) into the sale of TH assets during the previous Pakatan Harapan (PH) administration.

Shahidan, who is also chairman of the Perikatan Nasional Backbenchers Club (PNBBC), said the matter cannot be settled by just lodging a police report but through an RCI into what happened at Tabung Haji (TH).

“We see that a police report was lodged by the TH management and Baling MP Datuk Seri Abdul Azeez Abdul Rahim, who issued a statement in Parliament recently,” he said at a media conference.