Govt remains cautious on Abu Sahid’s funding for the corporate exercise, which may top RM30b

By P PREM KUMAR / Pic By MUHD AMIN NAHARUL

Any proposal to take over PLUS Malaysia Bhd must be backed by a strong funding source and operational capability to ensure the country’s largest highway operator will not face financial ruins in the event of an economic shock.

Second Finance Minister Datuk Seri Johari Abdul Ghani (picture) said any proposal by tycoon Tan Sri Abu Sahid Mohamad to acquire PLUS Malaysia must meet the government’s requirements, including the ability to manage the highway in the long run.

Johari said despite the announcement for the proposed takeover, the government remains cautious on the financial strength to fund the corporate exercise which is valued to be more than RM30 billion.

Johari said Abu Sahid, who is the head at Maju Holdings Sdn Bhd, should declare his personal financial abilities and financing sources for the government to even scrutinise the proposal.

“He (Abu Sahid) must clearly declare where the money is coming from. If it’s from overseas, he must then explain his financial strength to pay back.

“If he wants to borrow to acquire the asset and after sometime he cannot afford to pay, what will then happen to the national asset?” Johari said after officiating Permodalan Nasional Bhd’s (PNB) investment campaign in Putrajaya yesterday.

Johari said this was not the first time the government had received proposals to acquire PLUS, but all the offers were rejected due to poor financial transparency.

Abu Sahid, the group executive chairman of Maju Holdings, had publicly expressed interest in acquiring both the 51% stake held by UEM Group Bhd and the 49% held by the Employees Provident Fund (EPF).

A local financial daily had reported Abu Sahid as saying, “I’m very, very confident of pulling it off. I have everything ready — I have the money, I have the blessing from the highest levels in the country, I have the advisors and bankers all ready, and I have the formula to do it.”

The UEM Group and the EPF took over the assets and liabilities of PLUS Expressways in 2011 in a RM23 billion deal.

PLUS currently operates five concessions — Projek Lebuhraya Utara-Selatan Bhd (with an 846km concession that includes the North-South Expressway, New Klang Valley Expressway, Federal Highway Route 2 and Seremban-Port Dickson Highway); Expressway Lingkaran Tengah Sdn Bhd (with a 63km concession that includes the North-South Expressway Central Link; Linkedua (M) Bhd (with the 47km Malaysia-Singapore Second Crossing); Konsortium Lebuhraya Butterworth Kulim Sdn Bhd (with the 17km Butterworth-Kulim Expressway; and, Penang Bridge Sdn Bhd with the 13.5km Penang Bridge).

All of PLUS concessions end in December 2038. Abu Sahid owns Maju Expressway Sdn Bhd, which operates the Maju Expressway (MEX) that links Kuala Lumpur city centre with the Kuala Lumpur International Airport (KLIA) in Sepang.

A 16.8km extension to KLIA will further increase the value of MEX. The extension, known as MEX 2, is slated to cost RM1.7 billion to construct — with the engineering, procurement and construction sum of RM1.29 billion fixed under the contract.