KUALA LUMPUR (June 25): New York-based Global Infrastructure Partners (GIP) was chosen to participate in the exercise to privatise Malaysia Airports Holdings Bhd (MAHB)(KL:AIRPORT) due to its compliance with the stringent criteria set by Khazanah Nasional Bhd, said Prime Minister Datuk Seri Anwar Ibrahim on Tuesday.

“The criteria included retaining Malaysian nationals as the chairman and chief executive officer (CEO) of MAHB, and ensuring that the majority shareholders are Malaysians,” Anwar noted, adding that these stringent requirements resulted in only five out of the initial 145 interested companies being deemed qualified by Khazanah to participate.

“Other companies wanted management rights, including positions such as chairman and CEO, which were not accepted by Khazanah. That is why GIP was chosen,” Anwar told Dewan Rakyat during the prime minister’s question time.

However, Anwar stressed that the sale of MAHB’s ownership to a foreign firm is irrelevant, as GIP and Abu Dhabi Investment Authority (ADIA) are acquiring only the existing 27% public shareholding, with their total ownership increasing to 30% upon completion. Meanwhile, Khazanah and EPF will collectively increase their stake in MAHB from 41% to 70%.

Anwar added that discussions about privatising MAHB began a year ago due to lower profit and capacity projections, compared to neighbouring countries, despite the group being in the black.

“On security matters, it is also irrelevant as the Malaysian government will still own the airports and retain responsibility for security, with the president and CEO being Malaysian,” Anwar noted.

MAHB deal not referred to Cabinet

Meanwhile, Anwar acknowledged that the privatisation exercise of MAHB was not discussed in the Cabinet, and he only informed the Cabinet after Khazanah made its decision.

He emphasised that investment matters involving Khazanah, EPF and Permodalan Nasional Bhd (PNB) are not under the jurisdiction of the Cabinet.

“Investment matters have never been referred to the Cabinet, even during times when the Opposition was in government,” Anwar said.

Last month, Khazanah, EPF, GIP and ADIA — via a consortium named Gateway Development Alliance Sdn Bhd (GDA) — announced a conditional voluntary offer to acquire all remaining 1.12 billion shares in MAHB not already held by them at RM11 per share, in cash. They also intend to delist MAHB.

Upon completion of the offer, MAHB will be wholly owned by GDA, which will be 40% owned by Khazanah, 30% by EPF, and the remaining 30% by GIP Aurea Pte Ltd.

GIP Aurea is 83.33% owned by GIP and 16.67% owned by ADIA. This would give GIP an effective 25% stake in GDA, while ADIA would hold a 5% share in the private entity that wholly owns MAHB.

The deal has been in the spotlight recently as the US-based investment company BlackRock, accused of involvement in the Palestinian genocide, is in the process of acquiring GIP.

Several quarters, including former prime minister Tun Dr Mahathir Mohamad, have ramped up pressure, urging Putrajaya to scrap the deal. Machang Member of Parliament Wan Ahmad Fayhsal Wan Ahmad Kamal has reportedly stated that the Opposition may take to the streets in protest against the deal.