PUTRAJAYA through Khazanah Nasional must not rush into the merger of government-linked UEM Sunrise Bhd with private developer Eco World Development Group Bhd, said Fahmi Fadzil.

In a statement, the PKR communications director said Eco World’s share value had dropped to RM0.39 from RM1.40 in 2015 while the company’s debt and cash flow were of great concern.

Khazanah Nasional Bhd owns UEM Group and holds a 66% stake in UEM Sunrise.

“If (the merger) is sanctioned, people will look to Khazanah to save Eco World in the future when it needs more money to be pumped in; moreover we have been reminded that the property market for the next few years will be weak,” said the Lembah Permai MP.

“The government must work hard to save the people, not private companies. The people are suffering from a third wave of Covid-19. It would look bad if the two companies are allowed to merge;  it will be seen as a bailout for the private sector.”

In a filing with Bursa Malaysia on Monday, Eco World said it had received a letter from UEM Group outlining the proposed merger.

In the letter, UEM Group said the consolidation would harness the strengths and capabilities of UEM Sunrise and Eco World and make it one of the country’s largest property companies.

Quoting analysts, Fahmi said if the merger were to go through, Khazanah Nasional’s share in UEM Sunrise would decrease from 66% to 43%.

“This is a loss for the people,” he added.

Amanah’s Raja Kamarul Bahrin Shah and Kuala Selangor MP Dzulkefly Ahmad have also slammed the idea of a merger.

Raja Kamarul urged Putrajaya to reconsider the proposal while Dr Dzulkefly questioned how the government would benefit from the exercise. – October 11, 2020.