Further to my yesterday post on KFC. Today The Star reported that as at 31st March 2005, Kulim has a net debt amounting to RM458.8million. The acquisition would invlove another RM18.7million interest payment per annum. New Straits Times reported that Kulim has a debt of RM595million, which is about 22% of it shareholder fund, minus Cash in hand of RM174million. Also in a smaller net debt situation.
Neither paper reported that KFCH would ultimately control by Johor state government.
Again, I disagree with state government involvement in business. It is using tax payer, our money to compete with private sector.
I feel that Johor state govenment should dispose off shares in Kulim and repay it debt to federal government.
Federal government has to cut diesel subsidy, reduce construction work within the country to improve financial situation.
On the other hand. State government never repay their debt to federal government. They have made substantial loss during Asia Financial Crisis and just finished their restructuring on company like Johor Corporation Bhd. Now, they want to borrow money to acquire our country biggest fast food chain.
Meanwhile, federal government has call off it plan to take over water industry from state governments. Govenment will adopt the model used by Penang Water Supply Corporation. Which listed on Bursa Malaysia and chair by Chief Minister or Menteri Besar.
I hope all state government would channel all their resources to water industry and Menteri Besar should be involve in redusing Non-revenue-water(NRW) if they really interested in business.
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