Friday 29 Mar 2024
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KUALA LUMPUR (Feb 27): PLUS Malaysia Bhd’s wholly-owned subsidiary Projek Lebuhraya Usahasama Bhd will convene an "informal call" with the holders of the latter’s RM23.35 billion Islamic bonds or sukuk to discuss, among others, the proposed further extension on the execution of the toll highway operator’s supplemental concession agreements with the Malaysian government to June 30, 2022 amid ongoing negotiations on toll restructuring between the highway concessionaire and the government.

CIMB Investment Bank Bhd, which is the principal adviser and lead arranger of Projek Lebuhraya Usahasama’s Islamic medium term notes of up to RM23.35 billion in nominal value, said in a statement on Thursday (Feb 25) that the scheduled informal call on Thursday (March 4, 2021) at 10am is pursuant to the letter from Projek Lebuhraya Usahasama to the sukuk trustee Maybank Trustees Bhd on Tuesday (Feb 23, 2021).

CIMB said, "The issuer (Projek Lebuhraya Usahasama) would like to convene an informal call with the sukukholders to provide an update on the abolishment of toll collections at Batu Tiga and Sungai Rasau toll plazas on the Federal Highway Route 2 and Bukit Kayu Hitam toll plaza on the North-South Expressway, and the abolishment of toll collection for motorcycles on Penang Bridge and Malaysia-Singapore Second Crossing."

"The authorised representative(s) of the sukukholders are requested to register themselves with Maybank Trustees as the trustee for the sukuk programme, by providing their names, designations, departments, contact numbers and e-mail addresses by filling up the form attached as appendix 1 in the letter and returning the duly completed form to the trustee via e-mail by 12:00pm on Monday, March 1, 2021 after which, the calendar invite containing the dial-in details for the call will be e-mailed to the authorised representative(s). 

"The number of authorised representatives to join the call have been requested to be limited to a maximum of two per sukukholder,” CIMB said.

The abolishment of toll collections at Batu Tiga and Sungai Rasau toll plazas on the Federal Highway Route 2 and Bukit Kayu Hitam toll plaza on the North-South Expressway took effect on Jan 1, 2018 while abolishment of toll collection for motorcycles on Penang Bridge and Malaysia-Singapore Second Crossing started since Jan 1, 2019, according to CIMB’s statement on Nov 13, 2019.

Projek Lebuhraya Usahasama’s negotiations with the government have been protracted, according to analysts.

Malaysian Rating Corp Bhd (MARC) analysts wrote in a note on Dec 18, 2020 that the rating agency, which had then affirmed its AAAIS rating on Projek Lebuhraya Usahasama's RM23.35 billion sukuk, had also removed the rating from "MARCWatch Developing" where it was placed from Jan 24, 2020.

The rating outlook is stable, according to MARC.

MARC said the stable outlook assumes the traffic volume will continue to improve to pre-pandemic levels by 2022 and remain supportive of Projek Lebuhraya Usahasama's cash flow generation. MARC said that when the toll restructuring negotiations with the government are completed in the near term, MARC will make a full assessment of the impact on Projek Lebuhraya Usahasama's credit profile.

"The (current) rating action is premised on MARC's view that as long as the protracted negotiations between the government and the toll concessionaire remain unresolved, Projek Lebuhraya Usahasama's rights and benefits under the current concession agreement remain intact. This includes the entitlement to claim toll compensation for the 18% toll discount on relevant classes of vehicles effective Feb 1, 2020. 

"MARC has also been made aware that pending completion of the negotiations, the existing and supplemental concession agreements between Projek Lebuhraya Usahasama and the government will continue to subsist and remain in full force.

"The government's decision to reduce Projek Lebuhraya Usahasama's toll rates in February and maintain fixed toll rates throughout the concession period without any compensation while extending Projek Lebuhraya Usahasama's concession agreement by 20 years to end-2058 from end-2038 currently had prompted the MARCWatch Developing placement,” MARC said.

According to MARC, Projek Lebuhraya Usahasama’s negotiations with the government on Projek Lebuhraya Usahasama’s financials under the current concession agreement and the interests of key stakeholders were still ongoing when MARC’s note was written.

In this regard, MARC said then that any decision on the toll restructuring appears unlikely anytime soon given the government's priority in addressing the economic uncertainties caused by the impact from the Covid-19 pandemic.

PLUS Malaysia, which was incorporated on Nov 29, 2010, had incorporated Projek Lebuhraya Usahasama on July 27, 2011 to undertake the consolidation of all highway concessionaires acquired under a single entity, according to the former’s website.

Khazanah Nasional Bhd and the Employees Provident Fund own 51% and 49% equity stakes in PLUS Malaysia respectively.

Khazanah’s stake in PLUS Malaysia is held via UEM Group Bhd.

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