KUALA LUMPUR: Maju Holdings Sdn Bhd has revised its takeover bid for PLUS Malaysia Bhd. It is now offering to absorb a RM2.7 billion toll compensation owed by the government and reduce toll rates by as much as 36 per cent, from 25 per cent originally.
The company also pledged to invest RM5.3 billion on improving all the highways under PLUS.
Maju’s revised offer came days after a Malaysian-led Hong Kong-based private equity group had offered to take over PLUS for RM3.5 billion.
RRJ Capital, which manages US$20 billion funds sourced mainly from United States and Middle East, also offered toll discounts of up to 30 per cent.
This would be based on new cars' prices as well as demolish toll booths to ease traffic congestion, RRJ Capital chairman Richard Ong told the New Straits Times last week.
PLUS is owned by sovereign wealth fund Khazanah Nasional Bhd and the Employees Provident Fund on a 51:49 basis.
“Currently, the government owes PLUS RM2.7 billion in toll compensation. If Maju Holdings takes over PLUS, we won't hold the government responsible for these debts,” Maju said in a statement today.
The company added that this would translate into RM2.7 billion savings to the government.
“Our enterprise value to purchase PLUS including outstanding debt to bond holders will be RM34.9 billion. This purchase consideration is a reflection of the true and fair value of this company and its assets, taking into consideration our intention to provide Malaysian road users tangible discounts,” Maju said.
Maju is proposing for PLUS to cut toll fares by as much as 36 per cent and promises not seek financial compensation from the government for the reduction.
The company said the RM5.3 billion investment pledged would include lighting up the entire length of the highway along with other much-needed upgrade.
Maju, which currently owns Maju Expressway Sdn Bhd and operate Maju Expressway (MEX), said with the latest offer, PLUS shareholders would see an estimated total equity internal rate of return of 16 per cent.
“This represents a return that far surpasses the cost of equity for a majority of other toll road concessions, both globally as well as across Southeast Asia,” it said.
The company is also confident that its operational track record in managing the MEX highway would help to reduce the maintenance cost for PLUS.
“We have successfully operated the MEX highway in a cost effective manner compared with PLUS toll roads. We have one of the lowest costs per kilometre in the country,” Maju added.