“Malaysia was hit by a massive blackout in 1994 and we seized the chance to secure two independent power producer licences. We were given a chance to find the right answer and at the right price,” he said in his speech.
While arranging for the financing, Yeoh found out that the only one type of financing available to Asian projects then was US dollar-denominated.
“Financing long-term infrastructure projects with short-term foreign currency deposits was never wise in the first place although it appeared then to be the easiest route,” he said.
“To make our initiatives work in Malaysia, we had to literally invent the financial wheel. We borrowed in Malaysian currency instead of foreign currency and in the process created the first long-term 15-year bond. We have always felt that Malaysia should tap into one of its greatest assets – its high savings rate rather than become liable to volatile exchange rates,” he said.
Yeoh said when the Asian financial collapse came in 1997, many of his compatriots could not escape its worst ravages, and were not spared the foreign exchange losses. “They were not prepared for what Shakespeare warned 'The slings and arrows of outrageous fortune' – the kind of reversal for which in this uncertain world of ours we must be most prepared for,” he added.
He said the group had also assisted the government to set up a new regulatory framework to introduce the Infrastructure Project Listing Category (IPC) through the then KLSE to seek funds from local and global investors on fast track.
“We succeeded. The expensive floating debt was retired. This single act improved the bottom line and cash flow by a large margin. The surplus cash flow was distributed as dividends to the shareholders, much to their delight,” he added.
In a similar fashion, Yeoh said the YTL group found the answer to the fast rail link project connecting the KL International Airport to the Kuala Lumpur Sentral Station in the city.
“The journey takes only 28 minutes. The train is similar to the Heathrow-Paddington Express but we built it at a fifth of the price. We simply had to, as we wanted to price the fare at RM35 for the 57 km journey.
“This was done so that an average man on the street can ride our train and yet we are starting to make profits in our second year of operations,” he said, adding that the technological expertise of Siemens complemented the group’s effort.
Yeoh said the group’s experience in owning and managing regulated assets in Malaysia served as a platform for more acquisitions of such assets in Australia and Britain.
“In Malaysia, it was our self-regulation that produced world class services at Third World prices. It was a case of enlightened self-interest! The regulatory framework in Britain and Australia, however, ensures that the regulator is forced by the full weight of the law to look after the interests of both the investors and the consumers in equal measure,” he said.
“We find little to complain in our investments in regulated utilities in both territories; indeed we found the experience most profitable. More than two-thirds of our revenue is now derived outside of Malaysia. We are no longer liable to local or regional economic cycles,” he said.
Yeoh said the group would march on for more regulated utilities throughout the globe.
“As a leader, there is nothing more sobering than the fact that your 10 million customers throughout the globe are voting with their feet, 24 hours a day, on your services,” he said.
Yeoh also attributed the group’s success to its very talented people, whom he said “rose to the occasion on every challenge”.
“I humbly pay due respect to them. I salute them and offer my gratitude in full,” he added.