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BN White Elephant Project #5 :: RM6.6 billion debt by JCorp

Dana Johor under JCorp was incurred heavy losses, and non-bumi investors have to bear for the brunt of mismanagement and corruption by Johor state government.

JCorp has about RM6.6bil in outstanding debt, I doubt JCorp can survive without the bailout from public fund.

I hope Johor Sultan intervenes on this non-political, but the financial heavy losses issue and asks for accountability from the Johor Menteri Besar, Abdul Ghani.

JCorp outstanding debt : RM 6600 million

Number of BN White Elephant Project monitored : 5

Total accumulated cost or losses: RM 13984 million.

JCorp to raise RM2.5bil

By RISEN JAYASEELAN

It plans to issue bonds to refinance debt due by the middle of next year

PETALING JAYA: Johor Corp (JCorp) plans to issue up to RM2.5bil in bonds in a move to refinance its debt that will be due by the middle of next year, reliable banking sources said.

“The bond issuance will refinance the bulk of debt that is coming due next year, meaning that JCorp may not need to carry out any big asset sale soon although there is still a small shortfall,” one banker said.

JCorp has about RM6.6bil in outstanding debt, out of which RM3.6bil is due to be repaid by July 2012.

In August, one of JCorp’s units, Kulim (M) Bhd, said it was buying RM700mil worth of oil palm estates and mills from its parent, JCorp, a deal partly aimed at helping the latter solve its huge impending debt obligations.


Prized asset: JCorp has interest in Pusat Bandar Damansara which is estimated to be worth more than RM1bil

The proceeds from this sale together with the new bond issuance will raise a total of RM3.2bil, leaving a shortfall of RM400mil.

The debt papers that are coming due in July are mostly held by banks, mainly CIMB Investment Bank and Maybank Investment Bank. It is likely that these institutions will take up the new bond issuance.

JCorp has a string of other assets to dispose of including its interest in Pusat Bandar Damansara, which by some estimates is worth more than RM1bil.

JCorp also owns 53% of Kulim, which in turn owns 50% of London-listed New Britain Palm Oil Ltd (NBPO) and 57.5% of QSR Brands Bhd. QSR owns 50.6% in KFC.

Kulim can easily fetch top dollar in hiving off any of these assets. But it should be noted that if these assets were to be sold, the sale proceeds would be “trapped” at Kulim.

What that means is that if the money Kulim got from the sale of NBPO or QSR were to be paid out in dividends, JCorp would only get half of that, with Kulim’s other shareholders enjoying the proceeds as well.

JCorp receives only a paltry amount of dividends every year. Its dividend receipts amounted to around RM10mil over the last 10 years, despite the total revenue figure of all companies in the group hitting billions of ringgit every year.

The nkkhoo.com comment board with Facebook account.
Ron says:

Malaysia’s debt is about 50% of GDP. BN said it is manageable. Yes, it seems “not bad now”, but if the government CONTINUE to SPEND like there is no tomorrow, than we will become another Greece or Zimbabwe. People also need to understand that, as the level of debt goes up, lenders will be more cautious in lending more money and may only lend us at higher interest rates.

Don’t spend away our children’s and grandchildren’s future.

nkkhoo please educate your readers more on such matter to save our nation!

nkkhoo says:

I have written several postings on Malaysia bad debts.

Sabariah says:

Tiga syarikat milik kerajaan negeri Johor dikesan diurus dalam keadaan tidak memuaskan dan dua mengalami kerugian, menurut lapuran ketua audit negara 2010.

Tiga syarikat berkenaan ialah YWJ Citra Holdings Sdn Bhd; Johor Skills Development Centre Sdn Bhd dan Kumpulan Pendidikan YPJ Sdn Bhd.

Prestasi kewangan YWY Citra tidak memuaskan kerana mengalami kerugian bagi tahun 2007 hingga 2009.

Kedudukan aset dan liabiliti juga tidak memuaskan kerana modal keraja pada tempoh sama semakin kurang nilainya.

Syarikat juga tidak mempunyai sumber pendapatan dan belum mendapat pulangan dari aktiviti perladangan dan hartanah yang diceburi.

Zamri says:

I heard JKing the sportwear company under JCorp also gulung tikar already.

Saiful K says:

JCorp hospital business will be under threat as Peter Lim of Singapore is opening his private hospital in Medini Iskandar. Gleneagles is said to set up in Iskandar as well.

Survivor of the fittest will come into play soon.

Suaramesra says:

2 recent examples of BN’s white elephants:

1) Kampus 66 acres for vocational training at Taiping cost RM1.6 billion that was completed in 2009 with 106 staff but zero student! (Gaji buta?)

2) Jetty near Pangkor cost RM28 millions that was built more than 5 years ago but left idle.

Malaysia Boleh!
Bole ikut nasib Greece!

nkkhoo says:

Can you snap some photos for these white elephant projects and find out its GPS if possible?

I will add them to my official BN white elephant list after getting these extra info.

gempak says:

Actually new digital cameras are equipped with GPS technology. For example, the Canon PowerShot SX230 HS digital camera come with GPS technology that’ll automatically tag your photos with time and locations. You can even view all the photos’ locations on a map by using special bundled software. nkkhoo can approach Canon for sponsorship to be the first blogger to do so, going round the nation to snap the evidence of ‘satu lagi gajah putih bn’.

nkkhoo says:

My three years old Nokia N82 is equipped with GPS tagging feature which I used it for my travel blogging projects.

Plan to get a mid-range Canon digital single reflection len camera soon to reuse a whole range of old lens for my Canon analog camera.

Saiful K says:

Malaysia will not become another Greece if only the corrupted Umno morons stop enriching themselves at the expense of the country , stop building more white elephants and above all start cutting your clothes according to your size. Be frugal evening if you do not know how start learning from your neighbour Singapore for once, they don’t have any resources yet they have mega reserves just like Hong Kong, Taiwan or even China. For once be humble learn from them and don’t learn from shenanigan Mahathir who started all the woes Malaysia is facing to day with the building of all the mega white elephants in the pretext of progress just so he was able to enrich himself, his family and his cronies. The worst of all he did all that in the name of the Malays, 99% of them are still the poor people of Malaysia, yet look at him, his family and his cronies who are all super rich. Despite being the P.M. for 22 years he did not give the Malays the 30% of the country’s wealth but he did get the 30% for himself, his multi millionaire son and his many cronies years before he retired. The corrupted shenanigan is not a true Malay and is therefore not in the least concern in the well being of the Malays. Even though he kept saying he was and still is implementing policies for the Malays, this is just so the Malays will keep supporting him.

Dabangg of Muar says:

Business Jihad – related to your favorite nasi lemak owner’s father who is a “racist” ?

Dabangg of Muar says:

nkkho still yearn to learn at your age so i salute you. our local graduans must have same spirit like you but somehow we have wasted out taxpayer money for majority of them to lepak-study and then graduated to become cybertroopers (like 7/24 monitoring nkkhoo skandal listings !

Wadiamanis says:

The failure of JCorp is embodied in its ‘Business Jihad’.

It is a case study of the MBA program at UTM:
http://www.jcorp.com.my/Publication/File/annualreport2009/annualreport2009.pdf

Lalang says:

More woes and financial irregularities for JCorp subsidiaries:

Yayasan Pelajaran Johor and Kumpulan YPJ
—————————————-
According to AG’s report, the Yayasan Pelajaran Johor financial statement which ended 21 Dec 2008 indicated that more than a quarter (26.9% or RM73.2 million) of YPJ’s RM271.9 million investment could not verified due to its lack of proper documentation for auditing. Furthermore, it has a debt of RM14.8 million to its subsidiaries.

Johor scholars owed as much as RM16.3 million to YPJ, and 95 percent or RM15.5 million in debts could not be verified due to a lack of any documentation. Already, YPJ ran at a loss of RM 2.7 million in 2008 while Kumpulan Pendidikan YPJ Sdn Bhd registered a loss of RM1.5 million in the same year.

Due to wastage and mismanagement, it is inevitable that YPJ will go bust eventually – it is only a matter of when.

Perbadanan Bioteknologi dan Biodiversiti Negeri Johor
(J-Bioetch)
——————————————————-

J-Biotech has nine subsidiaries with total assets of RM3.5 million and total current liabilities of RM18 million. Five out of these subsidiaries have current liabilities more than their current assets, which in other words mean they are technically bankrupt. Seven out of the nine subsidiaries ran at loss in 2008.

Government bailouts are expected until the company goes under one day soon.

nkkhoo says:

I should applied study loan from YPJ, probably they cannot find my file now.

A MCA local politician wanted to help me on YPJ, but I rejected the help for too shy to be associated with MCA.

Lalang says:

The people in Johor would like to know as to why Pelaburan Johor Bhd decided not to consider the option of letting ASJ and Dana Johor continue to float on the market or being taken over by private trust funds in view of reviving the two trust funds.

ASJ and Dana Johor have caused many pensioners in dismay and they have lost dearly to years of paying loan installments and interests to the lender banks. Therefore, the Johor state Government is obliged to be accountable to Johoreans the reasons as to why ASJ and Dana Johor has slumped.

The Johor State Government needs to impose stringent transparency in running its GLCs in order to ensure investors confidence in the future of Iskandar Malaysia.

Lalang says:

JCorp must be in financial dificulty. It knocked down its JB city centre Komtar shopping centre for rebuild but after 4 years piling is still in progress no sign of a new shopping centre. In the meantime, many shoppers have since flocked to the new KSL City.

Dabangg of Muar says:

now we know we shall boycott kfc
kfc has FRIED word in it anyway not good for health.
let umno goons get heart attack with too much fried stuff since they like kfc so much !

Dabangg of Muar says:

chua soi lek better do something to protect non-bumi stakes in johor corp.
mca better do action more in public rather than watching dvds.

Dabangg of Muar says:

we spent so much eating at KFC contributing to Johor Corps yet money earned suddenly up the smoke ? kfc now sounds fishy as well !
no wonder my dana johor is dwindling in value almost like penny stocks now !

nkkhoo says:

KFC Malaysia was started by a Chinese businessman, and KFC sold to a Chinese company before he retired in USA.

Muar poultry king, Lau wanted to buy the KFC from the Chinese company after the financial crisis in 1997.

UMNO goons engaged police to threaten him and forced him to let go the takeover. One of Lau’s brothers used to be the “five color” gangster head in Muar.

Perkasa now proclaims KFC is a bumi asset.

Lalang says:

Najib cannot introduce ‘Fat Tax’ as Denmark has done as it will kill KFC (then JCorp) immediately.