TM’s tenancy termination: ABS sukuk holders to face significant losses

SHAH ALAM - Menara ABS sukuk holders will face significant losses following Telekom Malaysia’s (TM) decision to terminate most of its tenancy at its headquarters in Bangsar, Kuala Lumpur.

Among the industry players that will be affected were the Employees Provident Fund (EPF) and Lembaga Tabung Haji (TH).

A sukuk industry source said the losses which was estimated to run up to hundreds of millions of ringgit may not affect EPF so much as it was not a big investment for them, but this will have an impact on TH and millions of its depositors.

According to the source, TM and its subsidiaries will only lease about 10 per cent of its office space at Menara TM.

This was a significant drop from 70 per cent, previously.

In 2008, EPF and TH’s investments in Menara ABS sukuk became a historical event for TM which needed funds for its high speed broadband project.

However, as the sukuk was about to reach its maturity early next year, TM had a change of heart and decided not to buy back the properties under Menara ABS sukuk.

It also decided to move from the building of its own headquarters.

The decisions, the source said would cause losses to the country’s investment institution during challenging times for the investment sphere.

Meanwhile, TM announced that its net profit for nine months ending Sept 30, 2022, increased to RM983.1 million, which was a 20 per cent jump.

Earlier this year, it was reported that the iconic Menara TM, which housed TM’s headquarters office was put up for sale.

The 55-storey freehold office tower located in Jalan Pantai Baharu was owned by Menara ABS Bhd.