SUBANG JAYA: The concessionaire of the West Coast Expressway (WCE) will start awarding contracts to build the RM5.94bil highway from April onwards.
All 11 packages to build the 233km highway connecting Banting in Selangor and Taiping in Perak will be awarded via open tender, West Coast Expressway Sdn Bhd (WCESB) chief executive officer Datuk Neoh Soon Hiong said.
The first five packages, three of which are in Selangor and the other two in Perak, would be tendered out in the second quarter of this year with the remaining six packages by the third or fourth quarter of this year, Neoh said when met after Kumpulan Europlus Bhd’s (KEuro) EGM yesterday.
KEuro has an 80% equity interest in WCESB, with IJM Corp Bhd holding the rest.
The group had received confirmation from the Government last month to commence work on the highway. It has a five-year timeline to complete the project, effective from Dec 20, 2013.
KEuro chairman Datuk Abdul Hamid Mustapha said the financing deal to pay for the WCE project was more or less in place.
Bloomberg had reported that WCESB was seeking to sell RM1.5bil of syariah-compliant debts.
“We have three parts – debt financing of RM2.5bil, government-support loan of RM2.24bil, and lastly equity of RM1.2bil. Whether or not we use sukuk or commercial bank loans, we will announce it later,” Abdul Hamid said.
KEuro is projected to make a profit in the year ending Jan 31, 2014 after shareholders approved a plan to sell a 10% equity stake in Radiant Pillar Sdn Bhd to IJM Land Bhd for RM52.5mil cash.
Radiant Pillar, a 50:50 joint venture between KEuro subsidiary KEB Builders Sdn Bhd and IJM Land subsidiary IJM Properties Sdn Bhd, is undertaking the Bandar Rimbayu development project near Kota Kemuning in Shah Alam.
Once the sale is complete, KEuro will only own a 40% stake in the project.
Abdul Hamid added that the Bandar Rimbayu project was the catalyst to sustain KEuro’s return to the black in the following financial year.
Shareholders also approved KEuro’s proposal to undertake a renounceable rights issue of 429.74 million new shares of RM1 each in KEuro, together with 214.87 million free detachable warrants, on the basis of three rights shares for every four existing shares held in KEuro. The free warrants are on the basis of one free warrant for every two rights shares subscribed to.
The company will also amend its memorandum and articles of association to increase KEuro’s authorised capital to RM3bil, comprising three billion shares, from RM1bil.
Penang-based MWE Holdings Bhd had in 2013 bought a 22.15% stake in KEuro while IJM Corp owns 22.96%. KEuro will likely see the appointment of a new CEO, as well as a MWE representative to the board of KEuro in January, said Abdul Hamid.