Toll road operator Plus Expressway said it will issue one billion ringgit worth of bonds to refinance debt and upgrade the North-South Expressway.

The issue would be made this year and work to the expressway was expected to cost RM1.04 billion, the company added.

Plus Managing Director Idrose Mohamed said CIMB has been mandated to handle the bond issue. Plus currently has total debts of about RM7 billion in bonds which are "AAA" rated.

Idrose also said the company had secured shareholder approval to reduce its debt service reserves to 2.25-2.5 times from three times, which would allow it to free up RM400-500 million.

Idrose said RM400-500 million could be given to shareholders in the form of higher dividends or used for future expansion.

On the Plus outlook, he said the company was optimistic it would meet its traffic growth forecast of five to six percent in 2005.

"Our numbers are looking good. We posted 1.6 percent traffic growth in the first three months because of the dampening effect of the toll increase and for the first four (months) we recorded growth of 3.2 percent," he said.

"Going forward, with the school holidays and festive period, we expect traffic growth to grow. We should be able to meet our forecast of 5-6 percent," he told reporters after the company's annual meeting yesterday.

Overseas projects

Idrose also said the company had recently submitted a bid to take over the operations and maintenance of a highway in Maharaskan, near Bombay, India.

"The tender closed last month. We are still waiting for approval from the Indian authorities," he said.

Idrose said Plus had been prequalified by Indonesia to bid for five portions of a highway project near Jakarta.

"We have yet to decide whether to participate in the project. We need to do some preliminary studies," he said, adding that the company should be able to make a decision by the end of this quarter.