Khazanah, EPF keep control of PLUS, tolls likely reduced

Despite the various offers and private biddings, Putrajaya is more inclined to keep its prized assets within the current shareholders


THE government is believed to have rejected the idea of disposing of PLUS Malaysia Bhd and is leaning towards allowing the present state-linked funds — Khazanah Nasional Bhd and the Employees Provident Fund (EPF) — to retain control of the highly sought-after highway concession company.

The sale of PLUS was deliberated at yesterday’s Cabinet meeting and the government is expected to make an announcement soon.

It is widely speculated that despite the various offers and private biddings to take the country’s largest concession holder, Putrajaya is more inclined to keep its prized assets within the current shareholders.

It is believed with the control of the highways and PLUS under the EPF and Khazanah, the government has the flexibility to reduce tolls significantly.

A source in Putrajaya said the government will make an announcement over the matter and declined to comment further.

Prime Minister Tun Dr Mahathir Mohamad had previously said the offers for PLUS, which owns about 1,200km of highways across the country, were too low. His statement then triggered a rush by the interested parties to revise their bids.

A source, who declined to be named, said the bids are still below the true value of PLUS.

“The government is expected to reduce tolls,” said the source familiar with the matter.

It is not known the significant impact of the toll reduction to the income of the highway operator.

The government could pay the compensation owed to PLUS and in return demand for the reduction of tolls.

A few parties had announced bids for PLUS, especially to acquire Khazanah’s stake despite Khazanah MD Datuk Shahril Ridza Ridzuan’s repeated statement that the fund had no intention of selling its holding.

He was reported as saying that all the offers for PLUS were “unsolicited”.

“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,” he said on Tuesday.

The offers from various parties have landed in the hand of the government. Khazanah owns a 51% stake in PLUS, while the private pension fund holds the remaining 49% interest.

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

Tan Sri Halim Saad had proposed to buy Khazanah’s entire stake in PLUS for RM5.2 billion. In what was the highest single bid by any parties for cash-minting PLUS, Halim also proposed a 25% discount on toll rates and for the concession period to end as per status quo — December 2038.

Halim, who is the executive vice chairman of Sumatec Resources Bhd, is partnering Datuk Wong Gian Kui to acquire Khazanah’s interest in PLUS.

Widad Business Group Sdn Bhd offered to buy PLUS for RM5.3 billion in cash. It will waive RM3.04 billion in compensation and assume debts of RM30 billion. Widad’s revised offer will waive the RM11 billion sukuk guarantee by the government and give the government the option to buy back PLUS after 10 years based on market valuation.

Maju Holdings Sdn Bhd’s Tan Sri Abu Sahid Mohamed had also put a bid, offering a toll reduction of between 25% and 36%.

Reports in October last year stated that RRJ Capital — a Hong Kongbased private equity firm with investments in China and SouthEast Asia — had proposed to acquire PLUS for RM3 billion.

The firm was reported to have offered a 20% cut on toll rates across the board if successful in its bid.

The government currently owes PLUS RM2.7 billion in toll compensation. But the government is the guarantor of the company’s RM11 billion debt.