News of the Day - 13 April 2015

• RM38.4bn high speed rail project approved

Lawmakers last Fri approved the RM38.4bn high speed rail (HSR) project which will connect Malaysia and Singapore and drive growth in the Iskandar Malaysia economic corridor. The government now has the mandate and funding needed to set up MyHSR Corp Sdn Bhd, the company that will undertake the construction of the system. As an initial investment, Ministry of Finance Inc will invest in 10m shares of MyHSR Corp for RM1 per share. Construction is expected to begin in 2016, with services operational by 2020.

• Mahkota Medical Centre draws IHH interest

A potential sale of Mahkota Medical Centre has attracted the interest of IHH Healthcare Bhd, sources say. They say the sale of the hospital could be a good fit for IHH although it would also be subject to the final sale price that would be agreed upon. “It is an interesting proposition from the sellers, but the price needs to be right as well valuation-wise so that it would be a strategic fit for the company,” they say. “Prices that are being explored could be lower than the indicative US$250m (RM912.5m),” they add. The Mahkota Medical Centre is a 266-bed hospital located in the heart of Malacca City on Jalan Merdeka and is said to be up for sale, according to Bloomberg. The potential sellers include Singapore-listed healthcare services provider Health Management International Ltd which owns a 48.95% stake in the hospital but with a control over it.  

• Malakoff pushing to complete Tg Bin power plant

Malakoff said it has spent more than RM300m to address the construction delays at its 1,000MW coal-fired power plant in Tanjung Bin, and is confident that the plant will be completed and commissioned in Mar 2016 as scheduled. CEO Datuk Syed Faisal Albar said as at Mar 2015, the actual progress of the plant was at 90.34%, compared to the scheduled progress of 95.42%

• EPF considering withdrawal of savings at 60

The EPF is planning to call for a public consultation as a first step towards raising the permissible age for members to withdraw their retirement savings from the current 55 years to 60 years. EPF's 2014 annual report revealed that an alarmingly high rate of 68% of all EPF members had less than RM50,000 in their accounts upon retirement. The EPF recommends having at least RM196,800 in basic savings, but statistics showed only 22% of active 54-year-old contributors met this minimum last year. A basic saving figure was derived based on a monthly income of RM820 a month for 20 years until the age of 75 years. The EPF, in its annual report 2014, put the average life expectancy of 72.6 years for men and 77.2 years for women.

• Double Tree hotel in KL sold for RM388m

Real estate tycoon Asok Kumar Hiranandani of the Royal Group has bought DoubleTree Hotel, the second parcel of The Intermark to be sold in a week. The Singapore-based Royal Group Holdings, a property group which leans more towards the hospitality sector, bought the 540-room, four-star hotel for RM388m, or about RM700,000 per room, a source from Royal Group Holdings said. A hotel employee said the hotel generally had an occupancy rate of 75%. Asok, chairman of the Royal Group, was ranked 20th among Singapore’s top-50 richest, with a net worth of US$1.4bn, by Forbes last year. The Intermark comprises four parcels, office blocks Integra Tower and the Vista Tower, DoubleTree Hotel and the Intermark Mall. All four parcels were put up for sale about a year or more ago, but it was only last week that the 39-storey Integra office block was sold to Retirement Fund Inc, also known as Kumpulan Wang Persaraan, for RM1.1bn, with an annual yield of 6%. (

• CIMB Private Equity Restructured

A corporate exercise is brewing at CIMB Group Holdings that sees former CFO Kenny Kim and senior executives mulling a takeover of the banking group's private equity business. Under the deal, Kim and his associates are expected to acquire a 70% stake in the CIMB private equity unit, with the balance to be retained by the banking group. The takeover move is believed to have the blessings of the top management. It is learnt the senior executives have secured the funding to proceed. As of Dec 31, 2013, the private equity firm was managing over RM6bn in invested and committed capital.