Support for portfolio companies based on outlook for each: Temasek

It points to strengths of both SIA and Sembmarine and the value they hold

Temasek's participation in its portfolio companies' capital raising is decided on a situation-by-situation basis, depending on the outlook for each company.

"It's not a fixed plan where we say, 'this is how much we're going to deploy, support our companies', because, unfortunately, things don't come out this way," said Mr Nagi Hamiyeh, joint head of Temasek's investment group and head of portfolio development at Temasek International.

He was replying to questions during the investment company's annual review yesterday about its support of several local portfolio companies over the past year, including Singapore Airlines (SIA), and the demerger of Sembcorp Marine from Sembcorp Industries.

He pointed to the strengths of both SIA and Sembmarine and the value they hold, and noted that Temasek's support aims to strengthen the positions of both companies.

Addressing Temasek's participation in corporate restructuring, such as in the cases of Sembcorp Industries, Sembmarine and real estate player CapitaLand, he stressed that these decisions are taken by the boards of the companies themselves.

"Our stated governance is very, very clear: We do not interfere with our companies' day-to-day management, we leave it to the boards," he said, adding that Temasek advocates having strong boards that work with the companies' management.

"However, as a very active shareholder, we do provide our opinions," Mr Hamiyeh said.

"We do like to think that from time to time, we add value by providing different perspectives in terms of what we see in the world or what we see other best-in-class companies doing, and we work with our companies as partners to try and create value for every shareholder."

In its annual review, Temasek also reiterated its key priorities in climate action and sustainable solutions. It has committed to halving its 2010 carbon emissions by 2030 and has a longer-term ambition of net zero carbon emissions by 2050.

"To do this, we are actively investing in climate-aligned opportunities and enabling technological and nature-based solutions that are carbon negative. These efforts complement and supplement the decarbonisation efforts of our portfolio companies," said Ms Neo Gim Huay, Temasek International's managing director for climate change strategy.

Temasek has formed a sustainability council to share knowledge and tools for carbon measurement, physical climate risk assessments and climate-related disclosures.

Mr Fock Wai Hoong, Temasek International's managing director for investment in South-east Asia as well as telecommunications, media and technology, was asked whether the investment company had plans to issue retail bonds.

In response, he said that Temasek remains flexible and open to bond financing.

Its decision will be driven by investment opportunities, market conditions, and its liquidity and gearing levels, he said.

On the investment company's outlook on China, Temasek International's joint head for North America and technology Mukul Chawla said it is optimistic about China and continues to look at growth opportunities in the market.

China is Temasek's largest market, with assets there making up about 27 per cent of its portfolio.

Mr Chawla said Temasek is mindful of regulations and changes in regulation in any country it invests in, but that tightening regulations in China do not change Temasek's stance on the country and the opportunities it affords.

A version of this article appeared in the print edition of The Straits Times on July 14, 2021, with the headline 'Support for portfolio companies based on outlook for each: Temasek'. Subscribe