PLUS conundrum far from over

Shahril Ridza says if there is going to be a sale it has to be driven by the current owners of the asset, and that part has never started


ANY decision to sell or restructure PLUS Malaysia Bhd, the country’s largest highway operator, will still need the green light from its two shareholders, Khazanah Nasional Bhd and the Employees Provident Fund (EPF).

Khazanah MD Datuk Shahril Ridza Ridzuan said the Cabinet is expected to arrive at a decision on PLUS in their weekly meeting today, but the due process to activate the actual sale or rearrangement of the toll road assets is the prerogative of the asset owners.

“In the first place, we have never decided to put up the asset for sale. There is no bidding process going on, so when we talk about the offers as bidders, that is actually mistaken because there are no bidders per se.

“These are all unsolicited offers made to the government, not to the shareholders — and that is why as far as we are concerned, we are not engaged in the process.

“That is why Khazanah and EPF, at this point in time, are not looking at it from the point of view of a sale because there has never been a process of selling the asset,” Shahril Ridza told reporters at the Bank Rakyat 2019 National Conference on Integrity in Kuala Lumpur yesterday.

The sovereign wealth fund is currently the biggest shareholder in PLUS, with a 51% stake, and the pension fund holding the remaining 49% stake.

Khazanah and EPF took over PLUS in 2011 in what was the country’s largest corporate takeover at the time, costing RM33 billion.

Shahril Ridza also maintained that Khazanah had no intention to sell PLUS, although he admitted that the government’s current valuation of PLUS was more in line with assessments made by Khazanah.

Shahril Ridza had previously described the offers made as an “undervaluation of the expressway’s real worth”.

“From a governance perspective, any decision on the sale needs to be done properly through the proper owners of PLUS which are Khazanah and EPF, and that part has never started. If there is going to be a sale, it has to be driven by the current owners of the asset,” Shahril said.

The government’s target to cut spending and eliminate tolls has attracted interests from private entities seeking to cash in on long-term steady returns. Despite a debt load of over RM30 billion, PLUS continued to record solid profits of RM21.35 million to RM62.39 million from 2011 to 2016.

The company has attracted four bidders namely tycoon Tan Sri Halim Saad, construction company Widad Business Group Sdn Bhd, equity firm RJJ Capital and conglomerate Maju Holdings Sdn Bhd. Halim’s revised offer in December, a 30% increase from his initial RM5.2 billion cash offer, made it the highest bidder for the toll-road operator.

In delivering Budget 2020, Finance Minister Lim Guan Eng announced a reduction of toll rates by at least 18% on all PLUS highways, a move that would result in savings of up to RM1.13 billion in 2020 for road users and RM43 billion over the entire concession period until 2038.