In today’s edition of Evening 5 — The PAC report reveals that the 8.5 mil expired Covid-19 vaccine doses in MoH’s inventory had cost RM505 million. Meanwhile, KNM seeks a one-year extension to its deadline to submit its regularisation plan, and Putrajaya will discontinue subsidies and price controls on chicken from Wednesday (Nov 1).
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00:00 [Music]
00:04 The Public Accounts Committee or PAC said 8.5 million COVID-19 vaccine doses
00:10 in the Health Ministry's inventory worth RM505 million have expired as of June 1st.
00:16 According to a report by the PAC, the Ministry had procured the vaccines based on projected demand,
00:22 but a drop in demand for vaccination, delays in receiving vaccine supplies and donations
00:28 from foreign countries resulted in an excess. The report also noted that due to the global
00:33 shortage of medical equipment at the time, the country had to undertake emergency procurement
00:38 of vaccines, ventilators and other essential supplies to tackle the COVID-19 pandemic.
00:44 This led to some procurement decisions being conducted via WhatsApp. In the case of the 104
00:50 malfunctioning ventilator units, the PAC said there was no written agreement between MOH and
00:56 PharmaNiaga Logistics which supplied the equipment. This means that no party can be held accountable
01:03 for this. There was also a discrepancy regarding the existence of warranties
01:08 for all the 136 ventilators supplied by the company.
01:12 [Music]
01:17 A day prior to its cut-off point to submit its regularisation plan,
01:21 PN17 outfit KNM Group has submitted an application to seek the extension of the deadline by a year.
01:28 According to its burst filing, the Oil and Gas Engineering Group is hoping to get its
01:33 deadline moved to October 30th, 2024. It said it would announce the outcome of its application
01:39 once it is notified of Brusa Security's decision. KNM triggered PN17 criteria on October 31st last
01:47 year after its auditor highlighted a material uncertainty related to its ability to continue
01:53 as a going concern. And its audited financial statements for the period ended June 30th, 2022,
01:59 with shareholders' equity on a consolidated basis less than 50% of its share capital.
02:05 KNM had intended to sell its German-based machinery and equipment manufacturer Borsig
02:11 to resolve its liquidity issues. However, the deal failed to materialise, leading the cash-strapped
02:17 outfit to subsequently default on three credit facilities. KNM shares were unchanged at 10.5 cent,
02:24 valuing it at RM405.51 million.
02:28 [Music]
02:33 The government will remove subsidies and price controls on chickens starting this Wednesday,
02:38 though state assistance and ceiling prices will remain status quo for chicken eggs.
02:43 This is in line with Putrajaya's approach of retargeting subsidies in phases.
02:48 Agriculture and Food Security Minister Datuk S.Mohamad Sabu said
02:52 ending broad-based subsidies for chicken would reduce leakages of subsidies
02:57 and exclude foreign nationals and high-income groups from enjoying them.
03:01 According to the minister, the government has borne RM3.8 billion for chicken and egg subsidies
03:07 since February this year. In a note, MIDF research said the move should not cause the
03:13 market price of chicken to increase substantially. It noted that chicken prices in most states are
03:19 now below retail price ceilings, except for Bahang and Selangor, and believes the government will be
03:25 closely monitoring the situation. It said this is a positive development for chicken producers
03:30 like Leonghap International, though it does not expect any impact from the development
03:35 or the upcoming third quarter results.
03:37 PMB, the EPF and Kuo are co-investing in Osram Opto Semiconductor's manufacturing facility
03:48 in the Kulim High-Tech Park in Kedah. According to a joint statement,
03:52 the co-investors have signed a sale and leaseback agreement valued at RM2 billion,
03:58 with a domestic subsidiary of AMS Osram, an Austria-based company known for its expertise
04:04 in intelligent sensors and emitters. The transaction is expected to conclude this
04:09 coming December. PMB, the EPF and Kuo will each have an equal ownership stake of 33.3%.
04:15 The investment is for a 10-year period with a clear exit strategy. The statement said the deal
04:21 offers an opportunity for the entities to invest in a high-quality and high-specification industrial
04:27 real asset in Malaysia, which provides competitive returns. It added that the injection of capital
04:33 would enable AMS Osram to establish the world's first fully automated 8-inch LED and micro-LED
04:40 manufacturing facility. The facility is expected to foster the development of an ecosystem to
04:46 support high-value-added activities such as semiconductor fabrication.
04:56 US private equity firm KKR has reportedly signed an agreement to invest US$400 million or RM1.9
05:04 billion in OMS Group. According to a Reuters report, the transaction was announced in a
05:10 joint statement, but additional details were not disclosed. It noted that the deal marks KKR's
05:16 latest investment in digital infrastructure in the Southeast Asian region. According to its website,
05:23 "OMS has done subsea cable installation and maintenance projects for the past 30 years,
05:29 and has offices in Malaysia, Singapore and Indonesia. The company will utilize KKR's
05:34 investment to accelerate growth, including expanding fleet size and capabilities and
05:40 investing in cable landing stations and subsea cable routes." It had reportedly been weighing
05:46 a listing on Bursa Malaysia this year in a deal that could have helped it raise up to US$300
05:51 million. However, the plan is said to have been shelved due to unfavorable market conditions
05:57 and would be revisited if and when the broader initial public offering market improves.