Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on December 20, 2019

KUALA LUMPUR: The deadline to complete negotiations for the acquisition of four highway concessions by the Minister of Finance (Incorporated) (MoF Inc) for a total enterprise value of RM6.2 billion has been extended by two months until Feb 29 next year from Dec 31.

This marks the third postponement. The first deadline was Aug 30, then it was extended to Oct 31 and later to Dec 31.

The four highways involved are Lebuhraya Damansara-Puchong (LDP), Sistem Penyuraian Trafik KL Barat (SPRINT), Lebuhraya Shah Alam (Kesas) and the SMART Tunnel.

In a bourse filing yesterday, Gamuda Bhd said MoF Inc and each of the concession holding companies have mutually agreed to the extension. Gamuda owns 44% of Litrak, and stakes in SPRINT (52%), Kesas (70%) and SMART (50%).

“The long stop date to satisfy the conditions precedent and the date of completion will be extended to a date which shall be mutually agreed on between the MoF Inc and each of the concession holding companies,” it added.

It did not disclose the reason for the postponement.

 In June, MoF Inc sent the offer letters to the four concessionaires namely Kesas Sdn Bhd, Sistem Penyuraian Trafik KL Barat Sdn Bhd, Lingkaran Trans Kota Sdn Bhd and Syarikat Mengurus Air Banjir & Terowong Sdn Bhd to acquire LDP at an enterprise value of RM2.47 billion, SPRINT Expressway at RM1.98 billion, Kesas Highway at RM1.3 billion and the SMART Tunnel at RM369 million. Gamuda had accepted the proposed offer by MoF Inc to purchase all of its equity stake in four companies.

Under the proposed acquisition, the government will acquire the highway concessionaires through a special-purpose vehicle (SPV) wholly owned by MoF Inc. The SPV will finance the offer of RM6.2 billion by way of bond issuance.

In a statement made on June 22, Finance Minister Lim Guan Eng said the acquisition of the four highways would save taxpayers from having to pay compensation of more than RM5.3 billion to toll concessionaires in order to freeze toll rate hikes until the end of the respective concession periods.

He said the collection of congestion charge will be sufficient to service the government’s debt, as well as to finance operation and maintenance costs of the highways without requiring additional budget allocation by the ministry of finance.

He also said the acquisition of the four tolled highways represents the first step in reducing the burden of highway users and fulfilling Pakatan Harapan’s promise.

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