What was the financial gap absorbed by the 2018 rescue?

Question

Accepted Answer

The Financial Gap Absorbed by the 2018 Rescue Plan

The 2018 rescue plan for Lembaga Tabung Haji (TH) absorbed a significant financial gap, estimated to be between RM10.2 billion and RM10.3 billion, representing the difference between the amount paid by the special purpose vehicle and the subsequent valuation of the transferred assets. This substantial disparity highlights the cost of stabilizing TH's financial position at the time.
Establishment of Urusharta Jamaah Sdn Bhd (UJSB)

In response to a growing deficit between TH's assets and liabilities, which threatened its compliance with the Tabung Haji Act 1995 and dividend payouts, the government established Urusharta Jamaah Sdn Bhd (UJSB). UJSB was set up as a special purpose vehicle under the Minister of Finance (Incorporated) to take over TH's underperforming and non-core assets.
Asset Transfer and Valuation Discrepancy

UJSB acquired these assets from TH for approximately RM19.9 billion, comprising RM19.6 billion in sukuk and RM300 million in cash. However, a subsequent valuation of these transferred assets placed their worth closer to RM9.7 billion to RM10 billion. This significant valuation gap of approximately RM10.2 billion to RM10.3 billion was effectively the financial burden absorbed to ensure TH remained solvent on paper.
UJSB's Financial Standing

Eight years into its ten-year mandate to rehabilitate the assets and redeem the sukuk, UJSB's financial standing indicates ongoing challenges. As of the end of 2024, UJSB reported total assets of roughly RM11.44 billion against total liabilities of approximately RM23.86 billion, with accumulated losses reaching around RM12.42 billion. This situation, where liabilities considerably exceed assets, suggests that the entity is still grappling with the consequences of the inherited portfolio.

Reading history

Hide →

This history is cleared when the page is closed.

What was the financial gap absorbed by the 2018 rescue?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends