Khazanah Nasional Bhd has managed to reduce its debt burden from RM55 billion to RM47 billion in one year through asset and investment sales, its managing director, Shahril Ridza Redzuan said.
He said the country's sovereign wealth fund also managed to generate RM9 billion in revenue during the same period and is expected to recover and able to generate RM5 billion in potential revenue this year.
“Although the value of our assets is still at RM130 billion, our debt has dropped by RM10 billion, so in terms of our net assets or our net balance sheet, it has been stronger," he said in an interview on RTM tonight.
Shahril also said that the process of selling assets was also seen as being able to restructure existing assets to be more sustainable and low risk.
“From our projection, Khazanah can and should have a debt of around RM35 billion because by using a combination of debt and equity from our government, we can maximise our income.
“As with other companies, if they want to buy assets they will not buy the assets with equity alone, they will buy the equity together with the debt," he said, adding that the sale of assets is a business strategy, and the people need not have to worry about it.
“If we were to look in terms of the public viewpoint they may be mistaken. They may think we are merely selling. But on the other hand, when we sell the assets and we generate money or new funds from the sales.
“The funds will be used for two things, one of which is reinvested in new assets to generate profits for Khazanah and the government,” he added.
Shahril said Khazanah used the funds to reduce the debt and generate returns on assets purchased, while increasing government revenue through dividend yields.
For 2018, Khazanah recorded a pre-tax loss of RM6.271 billion compared to a pre-tax profit of RM2.896 billion the previous year.
The profits were affected by slightly higher disposals compared to that of previous years, lower dividend income and higher depreciation provision, as it went through the transition process, which also coincided with market volatility.
Khazanah declared a dividend of RM1.5 billion for 2018.
The Pakatan Harapan government last year initiated the restructuring and reorganisation of Khazanah which constituted a change of leadership in its board and management, as well as the introduction of new mandates and objectives.