EARLIER this month, the top brass of Maju Holdings Sdn Bhd gathered in Sri Lanka, where the privately-held company signed agreements for four projects, which are potential game-changers.Maju entered into a collaboration agreement with the Ministry of Transport of Sri Lanka for the development of an integrated transport hub in Colombo and inked a memorandum of understanding to be the master developer of an integrated resort in Hambantota. It also signed a deal to develop 12 acres of residential land in Hambantota at a value of US$36 million (RM126 million), and will build a luxury hotel and service apartments at the Katunayake Export Processing Zone, close to the Bandaranaike International Airport.

Maju executive chairman Tan Sri Abu Sahid Mohamed acknowledges that some of these contracts could be worth a lot to the company but is not ready to peg a value to them as yet.

“There is no exact GDV (gross development value) as many of the projects are still being discussed. For instance, the multi-modal transport hub … we may or may not do the construction portion of it, [so] the value could change dramatically.

“For the integrated resort as well, there are many variables, but it could go to more than a billion ringgit even, depending on the plans,” Abu Sahid tells The Edge in Sri Lanka.

To him, the clincher is the Sri Lankan government’s interest in emulating his bus terminal in Bandar Tasik Selatan. Maju Terminal Management and Services Sdn Bhd (Maju TMAS), a wholly-owned unit of Maju, was appointed by the Malaysian government as the operator of the integrated transport terminal, which is known as Terminal Bersepadu Selatan (TBS).  The RM570 million terminal is linked to the KLIA Transit, KTM Komuter and RapidKL LRT networks, and can handle up to 45,000 passengers a day.

It seems that Japan International Cooperation Agency or JICA (formerly known as Japan Bank for International Cooperation or JBIC) had suggested that the Sri Lankan authorities look at TBS, which led to Maju TMAS inking contracts in Sri Lanka. “It is basically a recognition of our success in managing the bus terminal in Malaysia,” says Abu Sahid.

As for the development of the integrated resort, many plans are being ironed out. What is certain is that Hong Kong-based Shangri-La Hotels and Resorts has undertaken to build a 375-room resort on the shoreline of Hambantota.

“It is a big deal for Maju. The GDV of these developments is high, and we hope to be able to do well in Sri Lanka,” Abu Sahid says.

Hambantota is one of five future metro cities in Sri Lanka being developed under the Greater Hambantota Development Project.

Much of Sri Lanka’s development is being funded by China, via grants and loans, some of which are interest free. Between 2009 and 2011, Sri Lanka received some US$2.8 billion from China, largely in the form of loans. China’s EximBank has been the largest lender for developments in Hambantota.

Some of the main components include the development of greater Hambantota as an international business and investment centre, and the city of Ruhuna as the transport hub of Sri Lanka — both are projects where Maju can play a key role.

“Compared with some of the Chinese investors, we are small but we have our own expertise and we do have a foothold in the country now, so now we have to work towards bigger things,” says Abu Sahid.

While some Maju officials have been talking about a dual listing — in Sri Lanka and Kuala Lumpur — Abu says it is premature to speak about this.

Maju has been weighed down by Perwaja Holdings Bhd, a PN17 company. A check with the Companies Commission of Malaysia website reveals that Maju suffered an after-tax loss of RM140.6 million from RM205.6 million in revenue for the financial year ended Dec 31, 2013 (FY2013). Perwaja suffered a net loss of RM420.9 million from RM913.1 million in revenue for FY2013.

Abu Sahid has a deemed interest of 69% in Perwaja via various subsidiaries and its 16% stake in Kinsteel Bhd. But Abu Sahid stepped down from the Perwaja board in July last year and is not involved in the running of the steel company.

Other assets under Maju include Maju Expressway Sdn Bhd, the concessionaire for the MEX highway; Maju Assets Sdn Bhd, which has under its belt the Bandar Tasik Selatan township and landbank in Johor and Melaka with more than RM4 billion in GDV; and a thriving construction arm.  The construction arm has an order book of some RM2.8 billion, which could increase by an additional RM1.2 billion with an extension of MEX being negotiated.

As at end-December 2013, Maju had almost RM2 billion in non-current assets and slightly more than RM1 billion in current assets. On the other side of the balance sheet, the company had long-term debt commitments of RM1.5 billion and short-term borrowings of RM891.7 million.

In the past few years, Maju and Abu Sahid have been looking to venture abroad. In 2011, the company made an attempt to develop a toll road and monorail system in North Sumatra via a collaboration with the Indonesian government. Then last year, the company came close to bagging a US$200 million property development project.

Could Sri Lanka be third time lucky for Abu Sahid and Maju?

This article first appeared in The Edge Malaysia Weekly, on December 29, 2014 - January 04, 2015.

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