The Mahathir-inspired Perwaja Holdings Bhd is saddled with large debt.
Its major shareholders are Kinsteel Bhd (37.3 per cent), controlled by Pheng Yin Huah, and Maju Group (31.8 per cent), controlled by Abu Sahid Mohamed. Maju also has a 15.8 per cent stake in Kinsteel.
According to the Edge weekly (24 November), its Kemaman plant has not been operating since August last year and its 2000 workers are being paid RM450 monthly in the meantime.
Perwaja’s current assets amount to RM0.2bn while its current liabilities come up to RM1.9bn, reported the Edge. Not looking healthy.
The Edge cites sources as saying that its secured lenders – RHB Bank Bhd, Standard Chartered, OCBC and Kuwait Finance House – could be looking at a “haircut” of 20 per cent on Perwaja’s debt to them.
The EPF (that’s our money) holds a 41.3 per cent stake in RHB Capital Bhd, which in turn holds a 100 per cent stake in RHB Bank Bhd.
The unsecured lenders that should concern us too: Perwaja owes Petronas RM275m, TNB RM177m and the government RM201m. That would be our money.
The Edge quotes a source as saying these unsecured lenders could be looking at a 50 per cent haircut. “A 50 per cent haircut may look bad, but the unsecured lenders will lose everything if the assets are liquidated.”
If this happens, private debt will be transferred to the public sector, the burden shouldered indirectly by the weary public.
At this rate, we could all be left sporting crew cuts. No wonder short haircuts are in fashion.