KUALA LUMPUR - Malaysian sovereign wealth fund Khazanah Nasional Bhd is believed to be in talks to dispose of its 60 per cent stake in property developer M+S Pte Ltd to its joint-venture (JV) partner, Singapore state investor Temasek Holdings Pte Ltd, sources told The Malaysian Reserve newspaper.
"The deal could give the government a hefty return on investment," a source told the business daily.
Temasek on Thursday (Aug 23) declined to comment on market speculation.
It is believed that no such discussions have taken place.
According to the Reserve, the discussions come after the new Pakatan Harapan administration's review of government-linked companies in Malaysia, and push for these government-linked companies (GLCs) to slash fat salaries, focus on their core businesses and deliver higher returns.
Khazanah has a 60 per cent stake in M+S, with the remaining 40 per cent held by Temasek. The property joint venture was launched in June 2011 to develop four land parcels in Marina South and two land parcels in Ophir-Rochor as part of the Marina One and Duo integrated developments.
The mixed-use projects have a combined gross development value of about S$11 billion.
The Reserve reported that the talks between Khazanah and Temasek may also cover the sale of Khazanah's 50 per cent stake in Pulau Indah Ventures Sdn Bhd.
Pulau Indah develops integrated wellness projects located in Johor's Iskandar Malaysia. The developments, Afiniti Medini and Avira Medini, have a combined gross development value of about RM3 billion (S$1 billion).
The Khazanah board resigned en masse in July after Prime Minister Mahathir Mohamad said the fund had deviated from its original goal to help the Malays, the country's dominant ethnic group, and needed to be restructured.
The fund, which has stakes in over 100 companies worldwide, is expected to divest its holdings to help reduce Malaysia's RM1 trillion national debt.