MoF could bid for Khazanah’s entire stake in PLUS

Khazanah remains firm with its decision not to sell PLUS to any parties outside the govt

by AZREEN HANI/ pic by MUHD AMIN NAHARUL

MINISTRY of Finance (MoF) is believed to be eyeing for Khazanah Nasional Bhd’s 51% stake in PLUS Malaysia Bhd as Putrajaya seeks to prevent the much sought-after asset from falling into private companies.

According to a source, MoF would buy for the stake in the country’s biggest highway concession holder and retain the asset within the public sector, similar to the role of Khazanah currently.

The source, who declined to be named due to the sensitivity of the discussion, said the proposed acquisition would be brought to the Cabinet for deliberation soon.

There was no available comment from the MoF at press time.

Another source told The Malaysian Reserve that Khazanah’s management remains firm with its decision not to sell PLUS to any parties outside the government.

It is believed that the price offered by MoF for the entire shareholding in PLUS would eclipse previous offers made by various parties.

The move is not surprising after the government had given the green light to MoF to acquire four highways — Shah Alam Expressway, Damansara-Puchong Expressway, SPRINT Expressway and SMART Tunnel — in a deal valued at RM6.2 billion.

Last week, Khazanah MD Datuk Shahril Ridza Ridzuan shot down any possibilities that the fund would dispose of PLUS despite various “bids” made by several parties.

He said there was no official open bidding process for PLUS.

“We are not in the mood of actually selling the asset (PLUS) and actually, we have not got any kind of bidding process going on,” Shahril Ridza said last week. Khazanah owns a 51% stake in PLUS, while the Employees Provident Fund (EPF) holds the remaining 49%. The state-owned fund acquired the state in a complex deal worth a total of RM32 billion in 2011. It was among the largest corporate deal in the country’s history.

Several bidders had come forward to acquire Khazanah’s stake. Widad Business Group Sdn Bhd recently raised its offer by 77% from RM3 billion to RM5.3 billion for the total shareholding in PLUS.

Widad also included a compensation waiver of RM3.04 billion and debt assumption of RM30 billion, bringing the total enterprise value to RM38.3 billion.

Tycoon Tan Sri Halim Saad had proposed to buy Khazanah’s 51% stake in PLUS for RM5.2 billion, according to an offer letter dated Oct 11, 2019.

The former executive chairman of Renong Bhd has also proposed a 25% discount on toll rates and for the concession period to end as per status quo — December 2038.

Halim’s proposal remained the highest based on the 51% stake of PLUS.

A Hong Kong-based private-equity firm RRJ Capital also made a RM3.5 billion bid to acquire the country’s largest tolled highway concession holder.

The company offered toll discounts of up to 30% based on new cars’ price tags and plans to demolish toll booths to ease traffic congestion.

Maju Holdings Sdn Bhd has revised its bid by including greater toll discounts of up to 36% and forgoing the RM2.7 billion owed by the government to PLUS.

Meanwhile, Bernama reported Prime Minister Tun Dr Mahathir Mohamad as saying that Khazanah would be the current best choice for the government to manage the toll concession company and resolve its debts.

However, Dr Mahathir also said that the government is prepared to let PLUS go if there is a willing party to pay a high price for the acquisition and assume its debt.

“If there are offers by other people to take over the debts of up to RM30 billion, then it’s a good thing. For the government, we (will) talk with Khazanah,” he was quoted as saying.

PLUS concessionaires are the North-South Expressway, Second Link Expressway, Penang Bridge, North-South Expressway Central Link, Butterworth-Kulim Expressway and Seremban-Port Dickson Highway.