Ahad, 31 Mei 2015

Saving 1MDB's Assets






I've written three-part articles on 1MDB and already published by The Malaysian Reserve, kindly refer to the links below:


(1)  Geopolitical Risk Of 1MDB Could Be A Reality
(2) Is Edra Energy's IPO The Best Way Forward For 1MDB?
(3) Ways To Save 1MDB Assets
Also one in Bahasa on using PROKHAS to novate Goldman Sachs's contracts: http://goo.gl/sCkh9a

For the video interview in Malaysian Observer TV, please view it here: 
https://www.youtube.com/watch?v=xZv3PBaPK6Q





Selasa, 12 Mei 2015

Goldman Sachs dan 1MDB: Bukan "Plain Vanilla"


Demi selamatkan negara daripada cengkaman Goldman Sachs yang telah memegang 1MDB, saya cadangkan kita guna PROKHAS untuk buat "contract novation".

oleh Wan Fayhsal
(pautan posting asal di Facebook: https://goo.gl/xy66Ti)

Ini kupasan terakhir saya tentang 1MDB. Dan sebenarnya ini hal yang teknikal, bak kata orang Perak "renyah" untuk orang awam nak faham. 

Ada yang tanya (baca: persoalkan kredibiliti) saya macam mana anda graduan Chemical Engineering tahu pasal corporate finance, etc.? 

Disamping saya ada "brief stint" di PETRONAS sebagai Business and Strategic Planner dan di Jabatan Perdana Menteri (TERAJU), saya ada sedikit "exposure" tentang penstrukturan dunia korporat. Saya masuk PETRONAS pun ketika era peralihan kuasa Tan Sri Hassan Merican kepada Tan Sri Shamsul Azhar. Banyak saya belajar di Technology and Engineering Division selaku planner. Juga di TERAJU.

Saya bukan pakar Corporate Finance. Tak pernah saya mengaku pakar tapi saya seorang Felo di PUTRA Business School. Dan saya tulis berkenaan 1MDB dalam The Malaysian Reserve dan kupasan di MOBTV bukan sebagai graduan Chemical Engineering atau pelajar MA di CASIS UTM tetapi sebagai Felo di PUTRA Business School. Saya diberi izin dan pengesahan oleh majikan saya untuk bercakap dan ulas bagi pihak mereka. 

Sudah tentu saya ilmu yang saya dapat tentang nak selamatkan aset 1MDB ini bukan bersifat "bookish". Kalau Puan Ainon Mohd. ada jaringan (network), saya pun ada jaringan juga terdiri daripada peguam, investment banker, sejarawan, banker, fund manager, regulator sekuriti etc. 

Sebelum saya tulis dan berhujah saya akan rujuk pakar-pakar dalam pelbagai bidang ini untuk sahkan apa yang saya ingin panjangkan kepada umum. 

Niat saya bukan untuk tulis sesuatu yang teknikal tetapi sesuatu yang bersifat "helicopter view" atau dalam adage Inggeris: "don't mistake the forest for the trees" tentang 1MDB dan cabaran Kedaulatan Negara. 

Adalah hamba Allah, pelajar ekonomi UM persoalkan fobia dan paranoia saya terhadap Goldman Sachs dan juga persoalkan cadangan saya untuk meminta Kementerian Kewangan untuk buat rundingan semula dengan "bookrunner" dan "underwriter" 1MDB iaitu Goldman Sachs berkenaan hutang tertunggak yang saya kata berisiko tinggi untuk aset-aset strategik negara jatuh ke tangan asing. 

Apa yang dilakukan oleh Goldman Sachs kepada 1MDB - bak kata orang-orang investment banker bukan "plain vanilla". Ianya sesuatu yang "unik" dan jarang dibuat. 

Malah banyak penganalisa yang lebih wibawa daripada saya dalam Bloomberg dan Financial Times melihat perkhidmatan yang dilakukan oleh Goldman Sachs kepada 1MDB adalah sesuatu yang ganjil dan mirip kepada skandal Goldman Sachs di Greece yang akhirnya meletus kepada krisis ekonomi besar-besaran kini yang dipanggil "Grexit" (Greece mungkin keluar dari EU). 

Cara bon (kertas hutang) yang disusun dan dikeluarkan oleh Goldman Sachs untuk 1MDB dalam jumlah yang besar sehingga mereka mendapat komisyen yang amat "masyuk" ($500 juta) bak kata investment bankers adalah sebenarnya bersifat "best efforts underwriting" yang membawa maksud Goldman tak janji boleh pastikan bon tersebut dilanggan sampai habis kesemuanya dan selalunya ianya bersifat risiko tinggi dan jarang-jarang berlaku. 

Ini yang kita risau sebab jenis kontrak apa yang dimeterai antara 1MDB dan Goldman Sachs yang entah dari mana mereka dapat cari pelanggan dan pemiutang yang memberikan $6 bilion USD kepada 1MDB.

Kononnya komisyen yang mahal itu sebab nak kejar satu joint venture dengan PetroSaudi. Maka sebab itu Goldman Sachs minta upah lebih daripada upah "underwriting" yang biasa. 

Kita tak tahu secara tuntas apa sebenarnya kerana hal ini hanya Lembaga Pengarah 1MDB yang perlu "come clean" kepada forensic audit. Kita tak mahu tengok-tengok dengan "high gearing/leverage" yang Goldman Sachs buat ini nanti jadi macam kes "currency swap" seperti Goldman buat untuk Greece. Kalau macam itu wassalam Malaysia. Balik kampung lah kita tanam jagung dan UMNO boleh bungkus. 

Maka adalah mustahak untuk Kementerian Kewangan melalui Ketua Setiausaha Perbendaharaan (KSP) berunding semula kontrak apa yang diistilah secara teknikal sebagai "NOVATION" dengan pihak Goldman Sachs selaku kepala kepada "Club Deal" dengan "sub-underwriters" yang lain yang terdiri daripada entah bank mana, kot-kot ada hedge funds dan institutional investors mana entah yang terdiri daripada orang asing yang sedang menangguk di air yang keruh. 

Mereka dah keluarkan pinjaman kepada 1MDB dalam jumlah yang banyak dan dah masuk dalam rekod mereka sekian-sekian tempoh, riba' yang mereka ambil adalah sebanyak ini. 

Kalau kita buat rudingan semula (novation) ke atas kontrak, sudah tentulah kita kena bagi pampasan kepada Goldman Sachs (dalam bentuk apa itu terpulang kepada kebijaksanaan KSP, Tan Sri Dr Mohd Irwan Siregar) yang mana Goldman Sachs kena runding balik kontrak yang Goldman tanda tangani dengan underwriters lain. 

Jangan fikir bila Goldman buat kerja yang bukan "plain vanilla" ini seolah-olah lepas kutip $6 billion USD untuk 1MDB mereka cuci tangan. Ini bukan bon biasa, dan para peminjam dan pelanggan bon 1MDB ini sanggup langgan bon yang tidak ada rating sebab mereka percaya kepada nama GOLDMAN SACHS. Ya, pelik sekali, bon 1MDB hanya diberi rating selepas dipungut nilai $6 bilion yang mana dilakukan dengan penuh RAHSIA. 

Masalah sekarang KSP duduk dalam 1MDB dan juga MOF Inc. Ada "conflict of interest". Sebab itu saya kata DS Najib kena "step aside" agar ada entiti lain yang bukan daripada MOF untuk ambil alih tugas novation dan saya cadangkan dalam tulisan saya guna entiti seperti Danaharta yang merupakan badan berkanun yang lahir daripada akta parlimen untuk operasi selamatkan Malaysia pada awal 2000 dulu oleh Tun M. 

Kini entiti itu sudah berada di bawa PROKHAS. 

Baiklah, saya berundur diri dulu daripada 1MDB. 

Terima kasih kerana sudi membaca dan mendengar pandangan saya yang tak seberapa ini. 
---
Wan Fayhsal,
Putra Business School

Isnin, 11 Mei 2015

Ways to save 1MDB’s strategic assets




Ways to save 1MDB’s strategic assets

by 
Wan Ahmad Fayhsal


There is only one main concern in saving 1MDB: the assets. 1MDB as company can and should be dismantled but the assets must fall into the right hands.
           
Since IPO is still the strategy of choice for MOF Inc., we must think hard how to unlock the value for Edra Energy’s IPO? How to ensure Edra – despite of its sitting on huge pile of debt – could still offer a really promising and attractive value propositions to potential investors?


1st way: Go nuclear

Besides of parading the traditional stable of power plants consists of gas and coal-fired ones, a good value proposition that Edra Energy could put forth in its IPO is by bringing in nuclear power project into its fold.

Concession period for nuclear power plant (NPP) is far longer than ordinary power plants. Like Turkish first NPP at Akkuyu, the payback period is 18 years with internal rate of return (IRR) more than 8%. The price of its feedstock – uranium – will not be influenced by fluctuation like the feedstocks of ordinary power plants, which are left at the mercy of global oil and gas prices.

In short, by having nuclear power plant as part of its power assets, the valuation of Edra Energy’s IPO could be made higher due to the long-term income stability it offers through the NPP. The prospect will be a tremendous one for potential investors.

Maybe someone would ask, how on earth could we finance this huge NPP project? We already have a good partnership model. One of the best financing models in the market is the one currently being used by Akkuyu nuclear power plan project in Turkey.

The Akkuyu project is the world’s first-ever nuclear power plant project that made use of the Build, Operate, and Own financing model or better known as BOO. Under this model, Rosatom State Atomic Energy Corporation (ROSATOM) will finance the whole project in its initial stage. Subsequently later they will sell, in the case of Akkuyu, 49% of the equity to external investors. With fixed purchasing power agreement (PPA) and fixed output from the nuclear power plant, the project surely able to attract big time investors.


2nd Way: Appoint Khazanah as anchor investor

1MDB is a strategic development company that pretty much mirrors Khazanah Nasional. Both entities are presided by the Prime Minister Dato’ Seri Najib as its chairman of the boardroom level where in 1MDB, the Prime Minister acts as the chairman of board of advisors while in Khazanah he is the chairman of board of directors. Both entities are guaranteed by MOF Inc. which is lead also by Dato’ Seri Najib as the Finance Minister.

What role should Khazanah play in saving 1MDB’s assets? Khazanah under the directive of the Prime Minister should be an anchor for the taking over the assets of 1MDB.

Khazanah could issue a bond with a clear intent and goal of “securing distress assets with lot of upside potential”. Both main assets of 1MDB – the land bank of Tun Razak Exchange at Sungai Besi and its power plants have huge growth potentials in which with the right strategies could really attract huge investors as well.


Can it be done?

The issue of feasibility is a no brainer. We just need to look how past leadership especially under then (Tun) Dr Mahathir managed to save Tabung Haji’s investment in palm oil at Riau, Indonesia in year 2002. The restructuring exercise finally led to the listing of TH Plantations in Bursa Malaysia.

A paper loss due to asset shuffling earlier was resolved by the restructuring team. They were not only able to stop the bleeding by recouping the losses, but also made handsome profit after selling the plantation to an Indonesian company. It was a win-win situation for all including the shareholders at large – the depositors of Tabung Haji.

This can be done to 1MDB as well. Once the debt is being cleared, assets being transferred to the right owners e.g. Khazanah therefore the listed company must be collapsed by selling it out in order to recoup the initial investment which direly needed to service the loan in order to avoid foreclosure.

Or we can learn from how Tun Dr Mahathir’s special economic advisor like Tan Sri Nor Mohamed Yakcop who managed to orchestrate a successful revitalizing plan for Malaysian economy post-financial crisis 1997 by restructuring troubled Malaysian companies.

Under the directive of Tan Sri Nor, he and his team managed to restructure many debt-laden government link companies (GLC) via special purpose vehicles of Pengurusan Danaharta Nasional Bhd (Danaharta) was formed under the parliament act and Danamodal Nasional Bhd (Danamodal) which received full backing as Bank Negara.

Once the troubled companies – the likes of Renong, Time Engineering, Perwaja, Crest, Petroleum, TV3, NSTP – were restructured by Danaharta through mergers and acquisitions exercises, government injected fresh capital via Danamodal into this companies. Government recouped the investments (plus profits) after listing them.

All of these rescuing efforts had not involved any external funding and assistance from outside. Yes, technically it is a form of bailout but it was done in proper manner without incurring unnecessary losses. In this saving game, bailout is the consequence, not the goal.

But this must be made very clear to the public at large that the listing of 1MD subsidiary like IPO is done with the intent to secure the distressed assets, not to save 1MD, neither it is meant to generate quick profits. All profits generated from this exercise will be shared in transparent manner to all subscribers at large in which the majority will be the depositors that hold accounts in the public fund institutions.

Collapsing 1MDB

Exit strategy must be made clear to all subscribers where the initial investments must be regained and channeled back to the investors. 1MDB must be winded down as part of the restructuring exercise. This will boost public confidence as well as government’s credential in managing astute crisis like this.

Apportioning of blame must come later. We are not saving the people who are guilty. Saving 1MDB it's not a winning game. Both ways will still incur losses. Both ways require saving institutions to take part. It's a matter of the depth of the losses. 

Like saving the injured accident victim. He may lose his leg or arm (eventually replaced by prosthetics) to save his life! So too 1MDB, it will definitely be a painful one.

The author is a fellow at Putra Business School. The article fist appeared in the The Malaysian Reserve, 11th May 2015.