Malaysia's Khazanah sells stakes worth $1.4 billion, including in Alibaba

KUALA LUMPUR (Reuters) - Malaysia’s sovereign wealth fund Khazanah Nasional Bhd has sold stakes worth 5.66 billion ringgit ($1.36 billion) in seven foreign firms including Alibaba Group Holding Ltd in the first 16 months of the current government, a minister said.

Khazanah [KHAZA.UL], which made its first loss in a decade last year, has been under pressure to raise funds for the debt-laden government of Prime Minister Mahathir Mohamad who took office in May last year.

The fund has sold an undisclosed portion of its stake in Chinese e-commerce giant Alibaba worth 2.23 billion ringgit. It was not immediately clear how large a stake it had in Alibaba, but its total overseas investments were around 14% of its total holdings.

Khazanah has exited companies including BDO Unibank Inc of the Philippines, London-based fashion retailer Farfetch, Indian tech firm Infosys Ltd and poultry company PT Charoen Pokphand Indonesia Tbk.

“Seeing that Khazanah does not receive any fund injection from external sources for its investments, the proceeds from the disposals are the main resource for new investments,” Economic Affairs Minister Mohamed Azmin Ali said in a written parliamentary reply last Tuesday.

Khazanah announced a plan earlier this year to deliver more funds to the government by pruning stakes in non-strategic assets and curbing its offshore presence.

Hit by higher impairments and lower dividend income, Khazanah posted a loss of 6.3 billion ringgit last year. The realizable asset value of Khazanah’s portfolio fell 13% to 136 billion ringgit last year.

The fund is targeting a pretax profit this year of at least 5 billion ringgit - the highest in eight years.

Khazanah wants to quadruple its foreign investments to 60%-70% of its total portfolio over the next decade and beyond to reduce exposure to domestic risks.

Reporting by Liz Lee; editing by David Evans