July 15, 2024

Global Infrastructure Partners Addresses Concerns Over BlackRock’s Role in Malaysia Airports Privatization Deal

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Global Infrastructure Partners (GIP) has clarified that BlackRock, its buyer, will not be involved in the privatization of Malaysia Airports Holdings Berhad (MAHB) amid criticism in Malaysia regarding BlackRock’s alleged ties to Israel.

GIP, along with Malaysian sovereign wealth fund Khazanah Nasional and other partners, is part of a consortium proposing a $3.9 billion takeover of MAHB. The plan has faced backlash from some Malaysian lawmakers, both from the ruling party and the opposition, who have voiced concerns over GIP’s connections to BlackRock. BlackRock has been scrutinized for its substantial investments in Israel, which is currently engaged in conflict with the militant Palestinian group Hamas in Gaza.

Khazanah Nasional has assured that GIP will not directly hire staff to manage MAHB. Malaysian Prime Minister Anwar Ibrahim dismissed claims that 25% of MAHB would be controlled by a pro-Zionist company as baseless, although he did not specify the company in question, according to Bernama, Malaysia’s national news agency.

Under the proposed deal, GIP and the Abu Dhabi Investment Authority would collectively own 30% of MAHB, while the majority stake would remain with Khazanah and the Employees Provident Fund (EPF), Malaysia’s largest pension fund. The EPF has not commented on GIP’s recent statements.

BlackRock’s $12.5 billion acquisition of GIP is expected to finalize in the third quarter of this year. GIP has committed that its current leadership team will maintain full control over its strategic direction and operations, as well as those of its portfolio companies, post-acquisition.

Phil Iley, GIP’s head of transport, stated that the firm would provide MAHB with necessary operational support despite being a minority shareholder. “If we are successful with our transformation, we would very much consider re-listing MAHB on the Malaysian stock exchange in the future,” Iley wrote, as reported by Bernama.

MAHB currently manages 39 airports within Malaysia and an international airport in Turkey. The privatization deal has sparked protests in Malaysia, mirroring previous boycott campaigns against Western brands such as McDonald’s and Starbucks due to their perceived positions on the conflict in Gaza.

GIP has confirmed that its strategic and operational plans for MAHB will proceed independently of BlackRock’s involvement. This move aims to address the concerns raised by Malaysian stakeholders and ensure the continuity of MAHB’s operations and growth prospects.

Financial Desk

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