PRESENT POINT POWER

Second Finance Minister Tan Sri Nor Mohamed Yakcop said "It's not a bailout. It's a willing-buyer, willing-seller partnership," when commenting on the Pantai Holdings takeover

In a media briefing, Second Finance Minister Tan Sri Nor Mohamed Yakcop on Tuesday outlined what is in store in the 2007 budget which will be presented to the nation on Friday evening by Datuk seri Abdullah - the road map towards increased economic prosperity, a better of life and a brighter future for Malaysians will be rolled out..

Budget 2007 Likely To Boost Private Sector Activity & Human Capital; August 29, 2006 22:26 PM

KUALA LUMPUR, Aug 29 (Bernama) -- If the Ninth Malaysia Plan (9MP) is to be used as a yardstick to see what's in store for the 2007 Budget, then it's likely the government will place tremendous emphasis on getting the private sector to drive the economy further and raise the quality of the country's human capital.

Making the private sector the engine of growth will be a key factor in next year's annual national budgetary plan, say observers.

In essence, the 2007 Budget will focus on implementing the key thrusts of the national mission for Vision 2020, which includes moving the Malaysian economy up the value chain, ensuring sustainable economic growth, enhancing the country's knowledge capacity, nurturing a "first class mentality" among the rakyat and for them to have a better quality of life.

To achieve these goals, Malaysians can expect that the government will create a more conducive environment for businesses to prosper while it concentrates on human capital development.

Given that there are still large numbers of unemployed graduates and a mis-match of skills for the industries, the government is expected to look into these issues seriously, say analysts.

After all, Prime Minister and Finance Minister Datuk Seri Abdullah Ahmad Badawi has always stressed the need to raise the quality of human capital in Malaysia, they add.

In human capital development, getting the best brains to do the job well is of utmost importance. It is here that industry observers are hedging their bets that the government will allow more qualified foreign professionals to work in Malaysia and provide incentives for the nation's top scholars.

Re-training, providing greater emphasis on education and getting the best out of the country's young talents will be crucial areas for the government to tackle if Malaysia is to thrive further when it achieves developed nation status by 2020.

For the private sector, and this includes foreign investors, industry observers are hoping for clearer directions from the government to help their businesses to prosper. They are hoping that the government will provide greater certainty for their business plans, improved delivery systems as well as innovative funding like the private financing initiatives as announced under the 9MP.

The business community has expressed the need to have a "feel good" scenario so that they would be motivated to drive the economy further. They feel that any move to drive the economy further will provide considerable spin-offs like more jobs and greater disposal incomes for the rakyat.

Given that infrastructure development is one of the main features of the 9MP, it is expected that development activity will stir from next year onwards once plans have been finalised for various development initiatives.

By Friday evening, the road map towards increased economic prosperity, a better of life and a brighter future for Malaysians will be rolled out by Pak Lah.

Khazanah's Acquisition Of Pantai Is Market-driven, Not A Bail Out, Says Nor
Mohamed; August 29, 2006 21:25 PM

PUTRAJAYA, Aug 29 (Bernama) -- Khazanah Nasional Bhd's strategic move to acquire a 30.68 percent stake in the profitable medical services company, Pantai Holdings Bhd, is a market-driven transaction and not a bailout, says Second Finance Minister Tan Sri Nor Mohamed Yakcop Tuesday.

"It's not a bailout. It's a willing-buyer, willing-seller partnership," he said when asked whether it was a bailout.

Nor Mohamed made these remarks when asked during a media briefing on the 2007 Budget at his office here. He stressed that the question of a bailout did not arise at all as Pantai was already a profitable company.

Pantai, which runs seven hospitals in Malaysia, reported a higher turnover of RM833.42 million for the year ended June 30, 2006 from RM691.159 million previously.

Pre-tax profit totalled RM57.393 million for the year under review from RM67.549 million in the previous year.

"From the outset, the purchase (by Khazanah) will solve the issue that had cropped up," Nor Mohamed explained when commenting on concerns that foreigners should not hold controlling stakes in strategic sectors like hospitals and medical care.

"The concerns had arisen from Pantai's shareholding in two concessions," said Nor Mohamed.

Singapore-listed Parkway Holdings Ltd's 30.68 percent controlling stake in Pantai had raised eyebrows since the latter is the concessionaire for supervising health checks on foreign workers in Malaysia and also providing support services to government hospitals in southern Peninsular Malaysia.

"The foreign investors' control on Pantai is deemed to be unsuitable," Nor Mohamed said.

Khazanah announced Monday that its subsidiary, Pantai Irama Ventures Sdn Bhd, had entered into agreement to buy Parkway Holdings' stake in Pantai at RM2.65 a share and will make a general offer for the rest of Pantai's shares once regulators approved the deal.

The government's investment arm will then sell a 49 percent stake in Pantai Irama to Parkway and enter into a shareholders' agreement that would see it (Khazanah) maintain majority equity ownership of Pantai Irama and for Parkway to manage and operate the hospitals under Pantai at a later date.

Khazanah would announce the details at a later date, Nor Mohamed said.

He also said that the Economic Planning Unit, which granted the two concessions to Pantai, would continue to take extra care to ensure that strategic concessionaires were not controlled by foreign parties. -- BERNAMA
____
and from Bloomberg, the Pantai takeover report

Parkway, Pantai Advance on Accord to End Controversy(Update 2)

Updated : 29-08-2006 Media : Bloomberg; Story By : Yoolim Lee and Chan Tien Hin

(Updates share prices in fifth paragraph.)

Aug. 29 (Bloomberg) -- Shares in Parkway Holdings Ltd. and Pantai Holdings rose after an agreement ending a year long controversy over the ownership of Malaysia's biggest health-care service provider.

Parkway, Singapore's largest private hospital operator yesterday agreed to cede control of its stake in Pantai. Parkway's purchase of a 31 percent stake in Pantai in September 2005 for S$139 million ($88 million) triggered criticism from ethnic Malay groups that the transaction didn't comply with Malaysia's privatization policy.

Under the agreement, Khazanah Nasional Bhd, Malaysia's state agency, and Parkway will transfer all their shares in Pantai to a venture. Parkway, which will assume operational and management responsibilities, will have a maximum 49 percent stake in the venture, while Khazanah will hold the remainder.

``We may buy some Parkway shares now that this issue is sorted out,'' said Jay Moghe, chief executive of Opes Prime Asset Management in Singapore, which manages $150 million. ``Heath-care service in Southeast Asia is a very profitable area to be in and Parkway is definitely a quality player. This is a rough and tumble kind of transaction as they try to expand.''

Parkway shares advanced 5 cents, or 2.1 percent, to S$2.41 at 1 p.m. in Singapore. Pantai shares gained as much as 9 sen, or 3.6 percent, to 2.60 ringgit in Kuala Lumpur, set for their highest close since May 8, 2000. Trading resumed today in both stocks after being suspended yesterday.

State Concessions

Malaysian Prime Minister Abdullah Ahmad Badawi said the government was studying the necessary steps to be taken on the stake sale in Pantai to Parkway after realizing it had become a problem as it related to government concessions for the supply of hospital requirements, Bernama reported on Aug. 13. The government had always hoped the equity would remain with Malaysians, the report said.

This isn't the first time that Khazanah entered to ensure control of a Malaysian company remains in Malaysian hands.

In 2000, Time Engineering Bhd., manager of Malaysia's biggest fiber optics network, scrapped a proposal to sell a stake in the company and two of its units to Singapore Telecommunications Ltd., a decision shaped by political considerations.

``You would always have these cross-border complications when it involves government or quasi-government bodies,'' said Opes Prime Asset Management's Moghe. ``We look for a better time to get in, until the complications clear.''

Khazanah Purchase

Khazanah in July 2000 agreed to buy 30 percent of Time Engineering for 2.3 billion ringgit. Singapore Telecommunications was looking to buy 14.5 percent in Time Engineering for 649.3 million ringgit and 20 percent of Time dotCom for 1.67 billion ringgit. It also wanted to buy 20 percent of Time Online Sdn.

Set up in 1993 to make strategic investments, Khazanah has stakes in more than 40 companies, including Telekom Malaysia Bhd. and Tenaga Nasional Bhd. with a combined market value of more than 150 billion ringgit.

The transaction, along with Parkway's planned ownership of as much as 49 percent in the venture, is subject to Malaysian regulatory approvals. If completed, the agreement will trigger a mandatory cash offer for all the shares outstanding of Pantai at 2.65 ringgit (72 cents) a share.

Newbridge Capital LLC, a San Francisco-based fund that bought 26 percent of Parkway for S$312 million in May to become the biggest shareholder of the company, has said it aims to boost returns by focusing on acquisitions for regional expansion.

The purchase of Pantai has lifted Parkway's sales in the past year. Pantai owns and operates seven hospitals in Malaysia with about 1,000 beds. The transaction probably won't have a ``significant impact'' on the company's earnings, Parkway said yesterday.

Citigroup Global Markets Singapore Pte acted as exclusive financial adviser to Parkway on the transaction.

& some latest news:

Man Arrested While Trying To Hand Over Memo To PM; August 30, 2006 01:01 AM

PORT DICKSON, Aug 30 (Bernama) -- Police arrested a middle-aged man when he tried to hand over a "memorandum" to Prime Minister Datuk Seri Abdullah during an official gathering here Tuesday.

The man was immediately taken to the Port Dickson district police station for questioning but it was not immediately clear if he was detained.

"We will have to make further investigations," Port Dickson district police chief Supt Mazlan Othman told reporters here.

He declined to revealed the man's identity or the contents of the memorandum.

The incident happened at the launching of the "Rapat Bestari Kebangsaan" programme, which was officiated by Abdullah. The function was telecast live on RTM 1.

According to eye witnesses, the smartly attired man suddenly walked up to the podium where Abdullah was seated with several other national leaders and tried to hand over an envelope containing the memorandum to the Prime Minister.

He was about two metres away from Abdullah when policemen and Abdullah's bodyguards intercepted him.

A minor commotion ensued and he was eventually overpowered. He was heard shouting, "Don't hit me, I am an old man. Save Tanjung Tuan!" causing his denture to fall off.

Information Minister Datuk Zainuddin Maidin, whose speech was briefly interrupted by the commotion, then continued addressing the crowd.

It was not immediately clear how Abdullah had reacted to the incident.

Some 10,000 people who attended the function witnessed the incident.