AFTER MONTHS OF CONCERN AND EXPECTATION, shareholders approved the privatisation of MMC Corp Berhad last week.
The action had been widely anticipated, as the rumour mill had been churning for a long time about the company’s privatisation plans.
Additionally, it was the proper move for Tan Sri Syed Mokhtar Al-Bukhary, as MMC Corp has long remained unnoticed by investors.
Similarly, several more businesses owned by one of Malaysia’s wealthiest men are believed to be privatised.
Who are they and how did they get there?
Why are companies that are publicly traded privatised?
Before we continue, let’s examine why firms are taken private following their initial public offering.
Naturally, all businesses issue stock in order to share profits with investors.
However, this is not always the case.
Occasionally, a company’s profit is not reflected in its share price for a variety of reasons, including a lack of transparency and lacklustre long-term prospects.
Without the chance of a turnaround, corporations may apply to Bursa to delist in order to avoid costs associated with convening annual general meetings and making constant corporate statements.
When the value of the company’s shareholders begins to dwindle in comparison to its true potential, it is better for its owners to take it private.
Is Pos Malaysia the next country to be privatised?
For years, speculation about the privatisation of Pos Malaysia has been rampant.
This is because the company has been bleeding money for an extended period of time and has failed to provide shareholders with returns on their investments.
The company, which has had four chief executive officers in the last five years, will simply be unable to compete with other courier services until it adapts.
Additionally, Pos Malaysia is overstaffed at the bottom with 7,000 postal workers, with some set to be fired off as they drag the firm down.
Can new CEO Charles Brewer turn things around? Ultimately, only time will tell.
Another possibility is Media Prima
For a long period, rumours of Media Prima’s privatisation circulated as well.
Due to declining newspaper sales and a tough market outlook, media companies are ready for privatisation.
Thus, the privatisation of Media Prima is imminent and has been discussed for a lengthy period of time.
However, will Syed Mokhtar follow through on the rumour?
He may reconsider if the group regains profitability.
The Tradewind group of companies
The tycoon owns a slew of businesses under the Tradewinds umbrella, including hotels, plantations, and real estate.
Only the Istana hotel has been permanently closed, while Crown Mutiara remains open.
Meanwhile, Tradewind Plantations is also a contender for privatisation, but the firm is still profitable thanks to the present high crude palm oil prices.
As a result, Syed Mokhtar may want to keep Tradewind Plantations close at hand.
Which company, then, will Syed Mokhtar privatise next? Your guess is just as accurate as mine.
Published by Zack Baharum