KEB secures RM4.74b debt facilities for West Coast Expressway Project



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KUALA LUMPUR (June 30): Kumpulan Europlus Bhd’s (KEB) 80%-owned subsidiary West Coast Expressway Sdn Bhd (WCESB) has secured RM4.74 billion debt financing facilities for the West Coast Expressway project.

In a filing with Bursa Malaysia today, it was revealed that WCESB had entered into a government support loan facility agreement with the federal government for a term loan facility of up to RM2.24 billion. WCESB has also entered into a facility agreement with RHB Investment Bank Bhd (RHB IB), RHB Bank Bhd and Malayan Banking Bhd for a syndicated term loan facility of up to RM1.5 billion.

Additionally, WCESB entered into a guaranteed Sukuk Murabahah Programme agreement with Bank Pembangunan Malaysia Bhd and RHB IB for an Islamic medium term notes programme of up to RM1 billion to be guaranteed by Bank Pembangunan and Danajamin Nasional Bhd, pursuant to a Kafalah facility.

“These constitute part of the funding requirement for the construction of approximately RM5.9 billion Build-Operate-Transfer (BOT) West Coast Expressway Project that was awarded to WCESB, the remaining balance will be funded via equity financing from WCESB shareholders, namely KEB and Road Builder (M) Holdings Bhd,” said KEB.

Road Builder, a unit of IJM Corp Bhd, holds the remaining 20% stake in WCESB.

KEB said that both shareholders are committed to ensuring the successful completion of the project, as evidenced by their respective undertaking in the shareholders agreement to subscribe for the required capital contribution in accordance with the funding terms of the project financing

“In line with general market practice of greenfield project finance, both shareholders also will take up each other’s required capital contribution in order to ensure there are no funding shortfall to complete the project,” said KEB.

KEB (fundamental: 1.5; valuation: 0.3) share price rose six sen, or 6.19% to RM1.03 today with a market capitalisation of RM972.65 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)