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Business Trust – An alternative listing vehicle in Malaysia


Following the Capital Markets and Services (Amendment) Act 2012 and the issuance of the Business Trust Guidelines (“BT Guidelines“) by the Securities Commission (“SC“) on 28 December 2012, the Malaysian capital market has seen the emergence of business trusts (“BT“) as a new listing vehicle to raise funds. A BT functions through a trustee-manager (generally expected to be a company), which owns and operates the business assets for the benefit of unit holders. The unit holders have an interest in the business assets of the BT and have rights to participate in the distribution declared by the trustee-manager.

The BT Guidelines envisage the establishment of the conventional BT as well as shariah-compliant Islamic BT. A BT must be registered wit the SC and the trustee manager of a BT must hold a capital market service license for fund management.



In order to obtain primary listing on Bursa Malaysia, the following must be satisfied:

  1. BT’s total market capitalization must be at least RM1 billion based on the issue or offer price.
  2. Where a listing of a BT is sought based on the strength of the BT group, the BT seeking listing and the subsidiary entities of the BT must have common controlling unit holders or controlling shareholders for at least one full financial year prior to submission to the SC.
  3. The core business underlying the BT must have been in operation and generating operating revenue for at least one full financial year.
  4. Additional requirements apply where the core business of the BT comprises of infrastructure assets. For example, concession or license to build and operate the infrastructure awarded by a government or a state agency in or outside malaysia, a development cost of at least RM500million and remaining concession or license period of at least 15 years from the date of submission to SC.
  5. BT group has a healthy financial position with (a) sufficient level of working capital for at least 12 months from the date of the listing; and (b) positive cash flow from operating activities.



BT extends a variety of advantage to both the owner of the assets or properties (the promoter) and the investor:-

  1. Unlike companies, distribution of returns is not governed by the BT’s accounting profit. A BT is able to pay out distributions so long as there is sufficient cash flow and the board of directors of the trustee-manager has declare that the trustee-manager is able to fulfil the liabilities of the BT.
  2. Retaining control of the assets – the promoter would normally hold majority interest in the trustee-manager as well as the predominant share of the units in the business trust. This give them control over the assets of the BT and ensures optimal monetisation of assets to the promoter from the listing of the BT.
  3. No restriction on the type of assets held – unlike REIT, a BT is free to operate a business in any industry and therefore there is no restriction on the type of assets it may hold.
  4. Gearing- there is flexibility in meeting the funding arrangements for a BT as it is not subject to any gearing restrictions.


Bloomberg noted that business trusts have had a mixed performance in Singapore and Hong Kong with Hutchison Port Holdings Trust, which raised US$5.5 billion (RM16.5 billion) in Southeast Asia’s biggest IPO in March last year, slumping 23 per cent since. The first shipping trust, Pacific Shipping Trust, meanwhile was delisted in March but HKT Trust in Hong Kong however has gained 60 per cent so far this year.








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