A SPECIAL purpose vehicle (SPV) will return RM19.9 billion in bonds and shares to Tabung Haji (TH) before the end of the year to enable hibah distribution, said CEO Zukri Samat.

He said the pilgrims’ fund will transfer the identified underperforming assets to the SPV, which is owned by the Ministry of Finance Inc.

In turn, the SPV will issue a RM10 billion seven-year sukuk and RM9.9 billion in no-maturity Islamic Redeemable Convertible Preference Shares, or RCPS-i, which will be transferred to TH by December 31.

“There are two criteria in order to pay the dividends. The first is that assets must be more than liabilities, and the second is that we must show profit. I’m confident that there will be some dividends,” Zukri told a press conference to unveil TH’s rehabilitation and restructuring plan in Kuala Lumpur today.

He said of the underperforming assets, 80% comprise equities with unrealised losses of more than 20%, and the remaining assets comprise properties and land assets with yields of below 2.5%.

“The total amount to be carved out is RM19.9 billion, maximum. This is not the final figure, but it will not exceed that. We are still looking at the numbers.”

He said the transfer will restore the balance sheet, and this will enable hibah distribution for the year, in compliance with the Tabung Haji Act 1995.

Yesterday, Minister in the Prime Minister’s Department Dr Mujahid Yusof Rawa confirmed that TH’s declarations of hibah since 2014 have not been in accordance with the Tabung Haji Act, as its assets do not exceed its liabilities.

He announced that an SPV will take over, rehabilitate and maximise the recovery of the fund’s underperforming assets.

An SPV is a subsidiary of a company that is bankruptcy remote from the main organisation. – December 11, 2018.