This article first appeared in The Edge Malaysia Weekly on December 9, 2019 - December 15, 2019

TAN Sri Halim Saad and his partner Datuk Wong Gian Kui have emerged as the front-runners to win the bid for highway concessionaire PLUS Malaysia Bhd after upping their offer price by more than a third, a source familiar with the matter tells The Edge.

It is understood that Halim and Wong increased their initial offer of RM5.2 billion by more than 30% to secure the deal but it is unclear if an extension of the existing concession period is involved.

“The government asked for a price and he [Halim] raised his earlier offer,” says the source.

When asked by The Edge if he had won the bid, Halim’s reply was a flat “I don’t know”.

Nevertheless, the source says Halim and Wong are leading the race with their revised deal.

If Halim does bag PLUS, that would mean it has come full circle back to him after he lost his assets, including the highway operator, held under Renong Bhd and United Engineers Malaysia Bhd to Khazanah Nasional Bhd when the two companies crumbled under heavy debt during the 1997/98 Asian financial crisis.

However, it is not clear if Halim and Wong are just eyeing Khazanah’s 51% stake in PLUS or if their offer includes the 49% held by the Employees Provident Fund (EPF) as well. Details are scant on whether the revised offer includes a longer extension of PLUS’ concessions and how much discount will be given to the road users on the existing tolls.

In October, Halim and Wong made a bid to buy Khazanah’s 51% stake in PLUS, offering RM5.2 billion for the block without any extension of the highway operator’s concessions, which are slated to end in 2038, and dangled a discount of 25% on existing toll rates.

PLUS owns five concessions:

1.    Projek Lebuhraya Utara-Selatan Bhd, which has under its umbrella the 772km North-South Expressway, New Klang Valley Expressway, Federal Highway Route 2 and the Seremban-Port Dickson Highway;

2.    Expressway Lingkaran Tengah Sdn Bhd, which includes the North-South Expressway Central Link;

3.    Linkedua (M) Bhd, which owns the Malaysia-Singapore Second Crossing;

4.    Konsortium Lebuh Raya Butterworth-Kulim Sdn Bhd or the Butterworth-Kulim Expressway; and

5.    Penang Bridge Sdn Bhd, which owns the two bridges connecting the island to Butterworth.

Halim’s offer edges out the bids submitted by Widad Business Group Sdn Bhd, which revised its offer price to RM5.3 billion cash from RM3 billion previously for the entire stake in PLUS, buying out both Khazanah and the EPF.

In addition to the cash consideration, Widad Business Group also offered a waiver of RM3.04 billion in debt owed by the government as a result of toll increase compensations and debt assumption of RM30 billion, bringing the total enterprise value of the offer to RM38.34 billion.

However, the Widad group also sought a 20-year extension of the concessions that end in 2038 and offered discounts of between 25% and 40% on tolls.

Other interested parties include Maju Holdings Sdn Bhd, the flagship of Tan Sri Abu Sahid Mohamed, whose bid has an enterprise value of RM34.9 billion including debt and toll reductions of as much as 25% to 36%, depending on the tenure of the extension of PLUS’ concessions, and sought to absorb RM2.7 billion in compensation owed by the government.

Abu Sahid’s plan also involves lighting up the entire North-South Expressway for an estimated cost of RM5.3 billion.

RJR Capital, the private equity firm run by brothers Richard and Charles Ong, has offered RM3.5 billion for PLUS but has kept many of its terms under wraps.

A proposal propagated by the Ministry of Finance sees the government acquiring four toll highways owned by Gamuda Bhd and its 43.56% publicly traded unit Lingkaran Trans Kota Holdings Bhd, namely the Shah Alam Expressway, the Damansara-Puchong Expressway, the SPRINT Expressway and the SMART tunnel, and forking out RM6.2 billion.

The proposal includes congestion charges as opposed to toll payments, which are slated to be reduced by 30%.

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