YTL seeing more assets for sale as regional economy slows
KUALA LUMPUR, May 29 – More assets are coming online for sale and at more reasonable valuations as the chilling effect from the global economic turmoil starts to bite said YTL Corporation managing director Tan Sri Francis Yeoh today.
He said that YTL, which sits on a massive RM14 billion cash warchest, was now “being chased” for deals rather than the other way around a few years ago.
“People are coming to us and we are beginning to see realistic prices,” Yeoh (picture) said at a press conference at Invest Malaysia here.
He said that Asia-centric portfolios were starting to suffer from “collateral damage” from the Eurozone economic crisis.
“Suddenly there are more and more companies wanting to sell assets,” he said, adding that he had told potential sellers previously that the good times “can’t last forever.”
Yeoh said it appeared that more private equity funds were willing to let go some assets which would deliver good yields to the buyer.
“We’re seeing double digit yields in Australia,” he said.
Yeoh said however that Asia as a whole would be less affected than Europe as countries like Indonesia and South Korea already went through restructuring during the Asian economic crisis and were now better prepared.
He said Europe was too politicised and not willing to face the music and was trying to hold on via bail-outs.
“With the bail out thing, it is neither here nor there,” he said. “It is what’s causing the deleveraging of the economy. The euro keeps going down. Who dares to invest?”
Yeoh said that 85 per cent of the group’s revenue and profits now came from outside Malaysia.
He said the company was on steady footing as its concession based businesses overseas such as UK’s Wessex Water and Singapore’s Power Seraya were long term and considered among the best managed in the world.
“They are stable concessions and not subject to the tyranny of quarterisation,” he said.
He said that YTL’s RM14 billion cash pile would be used for growth either through mergers and acquisitions or organic expansion.