Decision on PLUS sale should be made through Khazanah, EPF

This article first appeared in The Edge Financial Daily, on January 15, 2020.

PLUS operates eight expressways, including the 772km North-South Expressway, the Penang Bridge, and the second Johor-Singapore crossing, under five concessions. The Edge file photo

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KUALA LUMPUR: It appears that PLUS Malaysia Bhd shareholder wants to have the final say in the sale of the highway concessionaire, should the government decide to let go of the company.

Khazanah owns a 51% stake in PLUS via UEM Group Bhd. The remainder is held by the Employees Provident Fund (EPF).

“Any decision on sale, from a governance point of view, needs to be done properly through the current owners of PLUS, that is Khazanah and the EPF. That part has never started,” said Khazanah managing director Datuk Shahril Ridza Ridzuan.

He also pointed out that neither Khazanah nor the EPF has put PLUS up for sale.

“We have never put up the asset for sale. There is actually no bidding process, so there are no bidders. These are all unsolicited offers, which were made to the government rather than the current shareholders, and we are not engaged in the process of selling the asset,” Shahril told reporters on the sidelines of the Bank Rakyat Integrity Forum 2020 here yesterday.

Shahril was referring to the four offers the government has received for PLUS, which he said have undervalued the highway concessionaire, the largest in the country.

Both Khazanah and the government are on the same page as to PLUS’ valuation, Shahril said.

“I am very happy to note that valuation has now been validated by independent bankers both on the part of our side and the government. Going forward, we need to understand the policy decision that the government is going to make through the cabinet before we can take this any further,” Shahril said.

PLUS operates eight expressways, including the 772km North-South Expressway, the Penang Bridge, and the second Johor-Singapore crossing, under five concessions.

Shahril’s comments come ahead of a cabinet meeting today that will see the government deciding on the proposed takeover of PLUS by private parties, as well as the government’s proposed takeover of four Gamuda Bhd-related highway concessionaires in the Klang Valley.

The government’s contrasting proposals in its bid to reduce the toll burden on its people have raised the question as to whether the government wants to nationalise or privatise the nation’s highways.

To recap, the finance ministry announced in June last year its proposed takeover of four Klang Valley highway concessionaires that Gamuda has a significant stake in, for an enterprise value of RM6.2 billion.

But the cut-off date to negotiate and finalise the deal has been postponed thrice. Originally set to conclude by the end of August 2019, the deadline was pushed to the end of October, then Dec 31, and to Feb 28, 2020.

In the meantime, the government has received four offers to privatise PLUS, ranging from RM3.5 billion to RM5.3 billion, each with a different arrangement on the concession period and toll charges.

On Monday, Finance Minister Lim Guan Eng was quoted as saying the cabinet will decide on PLUS’ new owner during a meeting today, as well as the proposed takeover of Gamuda’s highways, and that an announcement will be made after the meeting.

Guan Eng previously said the matters would have likely been decided during the cabinet meeting last week, but the decision was deferred.