In this blog's July 31 posting "TNB's Indonesian Tsunami", it was reported that Tenaga Nasional's losses due to divestment could reach RM250 million. Yesterday, Business Times cited a figure of RM226.64 million. (I was told the wire agency Bloomberg also had the same story and put our utility giant's potential losses in the same quarter-of-a-billion-RM region).
CK, the president/ceo, can tell you that all 3 - blog, mainstream newspaper and wire agency - were all a bit behind.
The potential losses due to divestment as of this week are, actually, very close to RM300 million at TNB level. At group level it is close to RM350 million!
Tenaga insiders are putting the blame squarely on CK. They said everything was fine until CK came into the picture, change the rules of the game, and treaded on some big Indonesian toes, including its own Indonesian partner Pak Robert, who could be USD34 million richer once the divestment takes place.
CK had an uneasy meeting with Robert's rep in KL yesterday.
What to watch out for: TNB doing a Proton - Blame thy Predecessors!
Friday, August 04, 2006
RM350 MILLION, MAN
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In true Malay spirit, I suggest that any questions to losses by GLCs be answered this way:ReplyDelete
"Tak pa, tak pa. Ini kerugian yang berlaku akibat keadaan semasa. Kita kadang kadang untung, kadang kadang rugi. DUIT BOLEH CARI."
After the so called corporate restructuring of Malaysia Inc., the few brave critics warn of these kinds of things i.e. that they new 'smart kids' of Malaysia Inc. looks better on paper but instead no better than the cronies of yore. Born of the NEP, these are the group headed by KJ and Scomi and Danaharta - better educated but not better performer. In fact, I argued that they are worst because they are not entreprenuers and risk takers like their predecessors. The Neuvo Cronies as I called them are parasites and able to protect themselves better - they do very little for others and will fall on their face went faced with real challenge and competition. Yet they take more and take less risk. Welcome to Neuvo Cronism...ReplyDelete
Dear Rocky, if this is true, it's another blow to the much touted GLC's KPI and to the new breed of GLC managers.ReplyDelete
And it makes even harder for an average taxpayer, voter and consumer to accept the recent tariff increase by the national power company as being solely caused by rising petroleum, gas and coal prices.
In the broader context, it casts further doubts on GLCs venture abroad and on the private financing initiative (PFI) if funding for this latter undertaking is to come from public sources like the EPF and the National Pension Fund.
Let me say that I am being selfish because my future and the future of my younger children depend pretty much on my EPF contribution which started in 1969 and is still continuing.
Already we are hearing from news report of the EPF emerging as majoroty shareholder in companies that are not exactly the best performers in the Malaysian corporate scene.
I think those who have sufficient understanding of the economy and business like your goodself should help the public to monitor the action and performance of these funds and of the GLCs to ensure that they are not expoited for the benefit of a few while risking the interest of the majority.
We have heard of national and corporate pensions funds going bankrupt elsewhere. Pray to God such a disaster will not happen in our beloved county.
We all know what happened to the 'Savings & Loans' debacle in the U.S.ReplyDelete
Will EPF go the same way if TNB is any yardstick? EPF Ceo's announcement recently in the Star on investing in PFI projects require scrutiny. But by whom? PAC?
Now I wish I am 55, so that I can withdraw all my savings in the epf!ReplyDelete
But Rocky, according to today's The Star report, TNB CEO Datuk Che Khalib Mohd Noh denied the RM226-million loss.ReplyDelete
He said TNB would not invest in something that would make losses. He said there is value in the investment.
So, what the truth?
By the way, the NSTP shares are now down to RM1.68.
there was an emergency briefing for the board on august 1, a day after my original posting, on the problems at tnb coal.
the problems themselves are not something unknown to the board. pricewaterhouse coopers wasw engaged in april this year to help tnb resolve the issues.
at the briefing last tuesday, CK and board members were told of how they could "move forward". pwc evaluated 3 strategic options, my sources told me: status quo, retain the coal mine and divestment.
there are several options under divestment, i heard. but in conclusion, and i think CK will not challenge me on this, pwc told tnb that tnb coal faces real issues and there is huge amount owed to creditors.
a major problem is this pak robert, tnb's indonesian partner, has control of the mining rights and, after the tiff with CK, said he will sell out for USd34 milloin.
tnb's option is to recover the repayment of outstanding band loans of some usd50millio via strategic diverstment or by buying out pak robert.
potential write-off of tnb's entire investment in tnb coal would amount to a little less than rm350 million at group level.
CK should give malaysian business an interview.
i wonder why the stock hardly budged thus far in KLSE. 30,000 transactions and still the price remains the same. Opened 9.2. Closed at 9.2.
Possibly Tenaga buying back its own stocks to maintain public faith in the corp.
Thank you Rocky, I'll get MB to ask Datuk Che Khalib on this one.ReplyDelete
Perhaps you should invite all former BT reporters to blog with you because collectively they have several hundreds years of reporting experience.
I know this because I started my NSTP stint via Business Times in 1976. He had some of the finest economic, corporate and political reporters and analysts then.
We had Henry Chang, Datuk VK Chin, Datuk Steven Tan, Noorjehan Karim, Tan Siok Choo, Stephan Boey, Teh Poh Chee, Hardev Kaur, Datuk Ahmad Talib, Khalid Jaafar, Adlin Zamri, Guna and many, more.
When Tan Sri Abdullah (Kok Lanas) Ahmad was planning to collapse BT into the NST to boost the latter's circulation, I approched the power-that-be then and offered to buy BT but was politely told that "Tan Sri Abdullah had a plan for the paper".
I also asked a respectable former Malay Mail editor to enquire if the NSTP was interested to sell The Malay Mail. That was when the venerable evening tabloid was going through an uncertain period.
You see Rocky, I am a fool and a dreamer. But thank God I am not an absolute failure either -- Insya-Allah and Alhamdulillah.
Berita Publishing survives, albeit with the usual problems associated with the publishing industry, and had just paid the staff a token one-month bonus for the last financial year.
it all goes to show that amateurs are running the GLCs. The TNB is a case in point.ReplyDelete
Having an impressive degree is no guarantee that one can do the job.
There are just so many examples.
They are just smart young asses. They have proven that they are NO good.
You put a young punk, a very green horn to run an important GLC -- you run the risk of bad and poor management --.You lose big money. And at whose expense?
What ever it is, nampaknya seperti yang disebut oleh the Edge, one person is controlling every thing which such a small piece of cake. When does this happen? Was it always the case? Looks like TNB still has to manage this Robert, regardless of what TNB top guns think, Robert’s the man that they have to deal with (at millions of $$$$$). Does TNB need to have coal mine? Sources from seasoned industry players noted that other countries like Korea, Thailand etc have their own coal mine in Indonesia for security reason but TNB never explained why it did so.
This coal operation has been owned by TNB since 2004 but how come all these problems are only reported now? What triggered this Robert to hold TNB by its throat? Could it be that the current management did something that made him powerful enough to stop all operations? It’s nice to have answers to all these questions..only if CK can respond to this.
Maybe Public Accounts Committee (PAC) can look into this for the sake of all electricity users!
TNB Gets Roasted over CoalReplyDelete
Dear Rocky/datuk akj
So.... what has the previous management done wrong, or what has the current management undo (rightly or wrongly) that resulted in the roasted coal mine investment in Indonesia.
Everybody need to understand and learn the lessons from this episode for the good of the future management and generation, supaya pisang jangan berbuah dua kali.
Every project financed by the bank should have its own security feature. Sure they have done their due diligence. What happened ? Can somebody explain .....
business should not only be run on immediate financial results.there must be a clear vision and the commitment to follow through regardless of any obstacles,change in operating environment etc etc..ReplyDelete
tendency these days is to quit and change direction..
tesco and projet no good--go to car distribution.
making cars no good-go into construction and property
construction lose money go into making cars
at the end--mgmt expertise boils down to>
sell electricity no good-ask govt increase tariff
business no good --govt rmk9 project good
Betul tu--projet dah jadi 711-dah jadi vincent tan sebab orang melayu takut nak fikir susah2 panjang2.Tapi sekarang soldadu dah ada bhp oren.jangan pula jual kat 711 bila bos baru masuk.ReplyDelete
tnb beli itu coalmine masa JJ boss--katanye prospect gila best>>with harga coal dah naik mungkin JJ tu visionary.tapi mgmt baru mungkin nak ketuk JJ sikit--ambil write-off dulu..next year bolih reverse banyak2--untung besar--kontrek bolih sambung.ingat2 kat kub pun kadang2 ada kadang2 tak ada.
betul-lah-kita tak ada vision sangat.mungkin kena lasik lebih sikit.
The TNB coal deal can be at lost. TNB invested and acquired the coal mine when coal price was around USD 23 per MT. Current coal price is USD 41-45 per MT. ie over 80% potential profit on investment. Even we assume that the Estimate Coal Reserve quantity is maintained. What about if the ECR is higher than expected? kita tidak bolih kirakah?ReplyDelete