Global Infrastructure Partners (GIP) announced that its buyer, BlackRock (NYSE:BLK), will not be participating in privatising Malaysian airports following outcry in Muslim-majority Malaysia over the US firm’s purported ties to Israel.
GIP, Malaysia’s sovereign wealth fund Khazanah Nasional, and others are part of a group that has offered to privatize Malaysia Airport (MAHB) in a $3.9 billion deal.
The idea has sparked criticism and objections from some ruling party and opposition MPs in Malaysia, a staunch Palestinian backer, due to GIP’s ties to BlackRock’s major investments in Israel, which is fighting a war against the militant Palestinian Hamas group in Gaza.
MAHB’s planned privatisation is the latest subject of demonstrations in Malaysia, following boycott efforts against Western businesses such as McDonald’s (NYSE:MCD) and Starbucks (NASDAQ:SBUX) over the Gaza conflict.
GIP stated that its current leadership team will “retain full control and responsibility for the strategic direction and operation of GIP and the companies in which we have invested” following its acquisition by BlackRock, according to state news agency Bernama, citing a written response from GIP head of transportation Phil Iley.
A GIP spokeswoman verified Bernama’s findings. Khazanah did not immediately reply to calls for comment.
Iley stated that, despite being a minority shareholder, the firm would provide MAHB with as much operational support and assistance as necessary.
“If we are successful with our transformation, we would very much consider re-listing MAHB on the Malaysian stock exchange in the future,” according to him.
Khazanah has stated that GIP will not engage workers to directly oversee MAHB, while Malaysian Prime Minister Anwar Ibrahim has dismissed reports that 25% of MAHB will be held by a pro-Zionist corporation, without naming the company, Bernama reported.
According to the agreement, GIP and the Abu Dhabi Investment Authority will control 30% of MAHB, with Khazanah and the Employees Provident Fund, Malaysia’s largest pension fund, owning the other 70%. The fund did not respond to a request for comment on the GIP statement.
BlackRock’s $12.5 billion acquisition of GIP is likely to close in the third quarter.
MAHB maintains 39 airports in Malaysia and one international airport in Turkey.
