EPF roped in by Taliworks as partner in special-purpose JV firm

  • Business
  • Tuesday, 12 Aug 2014

The EPF-Taliworks JV will be targeting acquisitions of operating infrastructure assets with

PETALING JAYA: Taliworks Corp Bhd has roped in the Employees Provident Fund (EPF) as a partner in a special-purpose joint-venture company, Pinggiran Infrastructure Sdn Bhd, which owns a 65% effective equity stake in the Cheras-Kajang Highway.

The JV company, in which Taliworks has a controlling 51% stake, will be targeting acquisitions of operating infrastructure assets with “predictable cashflows.”

“We are excited about the prospects of our Pinggiran Infrastructure joint venture having seeded it with our effective 65% interest in our toll road division Cerah Sama Sdn Bhd (the holding company of the Cheras-Kajang Highway) and our partnership with EPF,’’ Taliworks executive director Lim Yew Boon said in a statement yesterday.

Shares in Taliworks rose to a high of RM1.50 before closing at RM1.39 after the deal was announced. The stock has risen 18.8% from RM1.17 a week ago.

Taliworks said yesterday the EPF would acquire Pinggiran Ventures Sdn Bhd, which owns a 31.8% indirect stake in Cerah Sama for RM68.68mil from Pinggiran Muhibbah Sdn Bhd.

Pinggiran Ventures also owns 49% of Pinggiran Infrastructure.

“The share sale and purchase agreement (SSPA) sets out the basis for the company to partner with EPF,’’ Taliworks said. Pinggiran Muhibbah is 84.6% owned by Taliworks.

EPF is said to have paid about 0.95 times Cerah Sama’s book value, which stood at RM228.4mil as at the financial year ended Dec 31, 2013 (FY13).

“EPF is striking a good deal as the acquisition values the company at RM217mil, which is a discount to its book value,” said a construction analyst.

Cerah Sama registered RM18.3mil in net profit for FY13.

Taliworks’ original investment cost for the effective equity interest of 55% in Cerah Sama in 2007 was RM55mil. Proceeds from the disposal to EPF would be substantially earmarked towards growing Pinggiran Infrastructure.

“This investment is in line with our objectives of growing mature infrastructure assets which have strong predictable cash flows,” EPF deputy chief executive officer of investment Mohamad Nasir Ab Latif said in the statement.

The latest transaction marked EPF’s strong appetite for mature infrastructure assets.

In 2012, the pension fund teamed up with the UEM Group to acquire PLUS Expressway Bhd for RM23bil cash.

EPF owns 49% in PLUS while UEM Group owns the balance 51%.

It also has an indirect interest in the Eastern Dispersal Link via its 38.9%-owned Malaysia Resources Corp Bhd.

Based on EPF’s third quarter 2013 performance indicator document, real estate and infrastructure contributed RM429.16mil or 4.24%, to its total income for the period. The figure, however, is 7.85 times the segmental income of RM54.62mil recorded in the third quarter of 2012.

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