KUALA LUMPUR – September 21, 2017: The boss of Maju Holdings, Tan Sri Abu Sahid Mohamed, is perplexed that his company’s proposal to take over PLUS Expressway Berhad, which manages some of the country’s major highways, has been rebuffed.
This also leaves the company’s group executive chairman to describe Khazanah Nasional and the Employees’ Provident Fund, both major shareholders of PLUS, as being very evasive.
But based on what happened a few years ago, Abu Sahid should have no compelling reason to be shocked and in disbelief.
In 2014, a bid by a group linked to former Renong Berhad executive chairman Tan Sri Halim Saad, the architect behind the building of the North-South Highway and the man who also oversaw PLUS for several year, was also rejected apparently for giving incorrect information.
The bid also guaranteed no increase in toll rates plus a reduction in the then rates.
A person familiar with banking and finance and whose former company provided consultancy services on mergers and acquisitions who read the bid but wished to remain anonymous described it as brilliant and one that should be supported, not rejected.
News of Maju Holding’s proposal to acquire PLUS and its subsidiaries by way of purchasing all shares from the main shareholders was first reported two months ago.
PLUS chairman Tan Sri Mohd. Sheriff Kassim confirmed that he had received a copy of Abu Sahid’s offer on September 11, with EPF making clear it had no intention of selling its shares.
“We haven’t discussed anything and they’re already saying no. Why are they so reluctant to meet me?” asked Abu Sahid when met by The Mole yesterday evening.
Insisting that his proposal was credible, Abu Sahid said it was drafted by renown international boutique investment bank, Evercore Partners.
He is also baffled by negative public feedback over the proposal, despite him guaranteeing a 20-year-long no toll hike for all highways under PLUS.
“Malaysians cry foul whenever toll rates are increased but when I told them I can guarantee a static toll rate for 20 years some also protest.
“It can be done. Evercore had done the maths and they told me that it is still profitable to operate the highways even if I do not raise the rates for 20 years,” stated Abu Sahid.
One concern echoed by the detractors is that it would deprive the 14.5 million EPF contributors a steady stream of dividend income.
Concurring that the contention may be valid, Abu Sahid however argued that the amount of annual dividend that EPF contributors has been getting from its RM400 million earnings from PLUS is only RM28 per contributor.
Abu Sahid said the proposal offers EPF and Khazanah a RM2 billion payment in cash each and that the amount paid to EPF will enable its contributors to enjoy a one-off RM142 dividend.
Maju Holding currently operates the Maju Expressway and is in the midst of constructing the Lebuhraya Putrajaya – Kuala Lumpur International Airport extension project.
PLUS has five concessionaires:
1. Projek Lebuhraya Utara-Selatan Sdn. Bhd. which operates the North-South Highway, New Klang Valley Expressway, Federal Highway Route 2 and Seremban-Port Dickson Highway.
2. Expressway Lingkaran Tengah Sdn. Bhd. which operates the North-South Highway Central Lin).
3. Linkedua (M) Berhad which operates the Malaysia-Singapore Second Link.
4. Konsortium Lebuhraya Butterworth-Kulim Sdn. Bhd., which operates the Butterworth-Kulim Expressway.
5. Projek Lebuhraya Usahasama Berhad which operates the Penang Bridge.