UEM Group and the Employees Provident Fund (EPF) hope to complete the proposed acquisition of Plus Expressways Bhd within eight to 12 months after acceptance by the Plus board of directors.

The acquisition proposal was tabled to the Plus board of directors for their deliberation last week, according to UEM.

UEM Group Managing Director and Chief Executive Officer Izzaddin Idris said completion of the acquisition involved getting approval from Plus shareholders, consent from creditors of Plus and its subsidiaries, approval from regulatory authorities and sanction of the High Court.

azlan "It is also subject to discussions with the government on a new concession agreement. The offer is subject to the successful restructuring of the concession agreement on acceptable terms to all parties," he said at a media briefing in Kuala Lumpur today.

Izzaddin said if there is to be no toll increase for the next five years, as what the government had announced in Budget 2011, compensation from the government could amount to less than RM5 billion.

As of June 30 this year, compensation from the government in Plus' balance sheet amounted to RM2.5 billion, he said. On Plus' overseas operations, Izzaddin said these contributed only a small portion as the group's main growth story came from its Malaysian operations.

"Plus, which is the fifth largest expressway operator in the world, is a key national asset which we are looking at preserving. Highway users can rest assured that Plus' standards of service and maintenance will be preserved and the safety of highway users is our priority," he said.

Joint offer

EPF deputy chief executive officer (investment), Shahril Ridza Ridzuan, said the offer was being made by Plus' existing shareholders. UEM and its parent Khazanah Nasional Bhd collectively own 55.25 per cent of Plus, with EPF having a 12.03 per cent stake and the balance by minority shareholders.

On Oct 15, UEM Group and EPF made a joint offer to acquire all of Plus' business undertakings, including assets and liabilities of the tolled highway operator. The acquisition is through a co-investment vehicle which will be 51 per cent owned by UEM with the remaining 49 per cent held by EPF.

plus highway sg besi 180205 aerial view 02 close up Shahril said EPF viewed the joint acquisition of Plus as an opportunity to acquire a mature, cash flow generating asset with an attractive risk-return profile.

"We see Plus as a good long-term investment with a steady yield and attractive returns. EPF members will directly benefit from profits generated from the highways," he said.

"If successful, this will provide stable returns for our 12 million members retirement savings and we believe through the joint ownership by EPF and UEM, Plus will be able to improve its financial performance further," he added.

Shahril said the proposed acquisiton will involve a cash payout of RM11 billion to minority shareholders and RM12 billion of the amount owing to Khazanah, UEM and EPF. Cost of the entire acquisition is RM23 billion, which translates to a price of RM4.60 per share, to be satisfied by cash.

Risks absorbed

Describing the offer price of RM4.60 as a ‘good price and fair deal’, both Izzaddin and Shahril said the offer is above the all-time high reached by Plus since it was listed on Bursa Malaysia 2002.

The Plus shares closed at a peak of RM4.46 on Oct 13, the last day of trading prior to the suspension, and is 14.7 per cent and 2.17 per cent premium above the three-month and six-month volume weighted average market price of RM4.01 and RM3.78 respectively.

Upon completion of the deal, Plus will be de-listed and the business undertaking will be transferred to a special-purpose vehicle which will absorb all the concession risks.

– Bernama