Report: Putrajaya mulls buying up PLUS

KUALA LUMPUR, Oct 14 — The federal government is considering buying over the country’s largest toll concessionaire, PLUS Malaysia Bhd, although it remains open to offers from private bidders, Lim Guan Eng said.

The Edge Financial Daily reported the finance minister as saying in an exclusive interview that Khazanah Nasional Bhd, which owns 51 per cent of PLUS, has proposed selling the stake to the government, supposedly over fears that a private takeover would give poor returns.

Lim said the government could finance the acquisition through cheap financing.

“We have the magic bullet; we are able to borrow at very low rates — that is what we want to take advantage of,” Lim told the business daily in a post-budget interview yesterday.

But any proposed acquisition of toll concessions will be assessed based on its impact on the government’s debt service charges, and will entail any compensation on freezing toll hikes Lim stressed.

He added there must also be substantial savings for road users, and that any offer to buy out PLUS has to be at a price that was agreeable to Khazanah and the Employees Provident Fund (EPF), which owns the remaining 49 per cent in the firm.

“We (the new government) reject policy of socialisation of losses and privatisation of profit,” he told the business paper.

As of now, the price Khazanah and EPF are seeking remains unclear. Lim cautioned that selling PLUS assets for below cost would invite criticism of not only the two shareholders but also the government.

Should this happen, the finance minister said the government would be accused of directing both Khazanah and the EPF to sell one of its most prized assets, and create the perception that the two funds are not independent.

“And [in that case], again people will accuse us of cronyism. In addition, the bondholders will downgrade [the debt papers],” he said.

So far, the plan to sell PLUS has attracted three acquisition proposals from the private sector, The Edge reported.

Maju Holdings Sdn Bhd, which is controlled by Tan Sri Abu Sahid Mohamed, was the first to bid for PLUS at an enterprise value of RM34.9 billion, which include debts.

The recent two proposals came from Malaysian-led private equity fund RJR Capital and Widad Business Group (WBG). RJR is reportedly offering RM3 billion cash to buy out the concession plus liabilities.

WBG offers two options, with the first being taking over of the 51 per cent stake owned by Khazanah for RM1.5 billion cash and the remaining 49 per cent to remain with the EPF.

The second option is a full takeover of the concessionaires from Khazanah and the EPF for RM3 billion cash.

Lim said the government needs time to evaluate the proposals from the private sector that involve the government guaranteeing the debt papers.

“The government will be responsible if there is any loss [given that the government guarantees the bond papers after takeovers by the private sector],” he said.

“Be patient and wait for announcements.”

Source: MalayMail