KUALA LUMPUR: The Employees Provident Fund (EPF) and Permodalan Nasional Bhd (PNB) have stressed that their RM2 billion investment in a cancelled semiconductor project by ams Osram AG in Kedah is protected by a robust agreement with the Austrian-German technology giant.
In separate statements to Business Times, the local institutional funds said, along with the Retirement Fund Inc (KWAP), they remain confident about Osram's financial strength.
Osram had a few weeks ago pulled the plug on its recently-completed micro LED plant in Kulim Hi-tech Park with an estimated US$1 billion (RM4.75 billion) multiyear, multi stage investment.
The current building represents the first phase of that investment.
It is now seeking a buyer to take over the lease of its Kulim micro LED plant.
That lease is held by PNB, EPF and KWAP who came into the picture last year through a €400 million (RM2.03 billion) sale and leaseback of the micro LED site with a commitment from Osram to buy it back from the funds after 10 years.
"PNB, EPF and KWAP acknowledge the recent developments involving ams Osram AG's cornerstone project related to its micro-LED programme," the EPF said in its statement.
"While we recognise the potential impact on our Kulim industrial assets, we want to assure that our investment is safeguarded by robust risk protections which have been incorporated in the terms of the agreement with the company.
"We are confident that ams Osram AG will continue to ensure commitment in its obligations to fulfil the terms and conditions of the agreement," it added.
PNB, in its statement, said the three local funds and Osram are in regular contact to explore alternative solutions to ensure a mutually beneficial outcome for all involved.
This includes looking for a different party to take over Osram's lease.
"We have a robust agreement and are comforted that out investment with ams Osram is protected.
"We remain optimistic about ams Osram's financial strength as a leading tech company to maintain the commercial viability of the manufacturing facility," PNB added.