Both MoF and EPU raise concerns over the sale of a national asset to Abu Sahid’s Maju Holdings
By P PREM KUMAR / Pic By MUHD AMIN NAHARUL
A Private offer to buy all of highway operator PLUS Bhd for RM30 billion is unlikely to proceed on negative evaluation by the Ministry of Finance (MoF) and the Economic Planning Unit (EPU).
The two government agencies are said to have found the proposal by businessman Tan Sri Abu Sahid Mohamed not viable economically and have raised concerns over the sale of a national asset to a private entity, sources told The Malaysian Reserve.
The two agencies had reservations over Maju Holdings Bhd — the vehicle Abu Sahid proposed to buy PLUS — financially, as well as its ability to operate the highways.
“The government is concerned on the fact that PLUS is more than an asset…it is a national identity,” one source said.
It is also understood that these government agencies were against the sale if the proposed acquisition was to be funded using foreign funds.
“Abu Sahid has yet to clarify on definite financial backing and repayment structure and means to meet the repayment obligations,” he said.
The concern was that PLUS’ assets would be susceptible to foreign control in the event of any failure to repay such loans.
“If he fails to repay the foreign banks in between, the foreign banks can step in and monetise PLUS in any way they would want to do it,” said the source.
The source said this was the third offer the government had received for PLUS in five years. Both bids were also made by businessmen controlling large infrastructure companies.
Abu Sahid, executive chairman of Maju Holdings, had publicly expressed interest of acquiring PLUS — currently 51% held by UEM Group Bhd and 49% by the Employees Provident Fund (EPF).
The UEM Group and the EPF took over the assets and liabilities of PLUS Express- ways in 2011, in a RM23 billion deal.
PLUS currently operates five concessions — which include the North-South Expressway, the New Klang Valley Expressway, Federal Highway Route 2, Seremban-Port Dickson Highway, North-South Expressway Central Link, Malaysia-Singapore Second link, Butterworth-Kulim Expressway and the Penang Bridge.
All of PLUS’ concessions will end in December 2038. Abu Sahid owns Maju Expressway Sdn Bhd (MESB), 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.
Last available records show that MESB registered a net profit of RM7.62 million and RM105.57 million in revenue for its financial year ended Dec 31, 2015.
The expressway has a 33-year concession, which started in December 2004.