New RM2b highway

PETALING JAYA: Putrajaya Perdana Bhd, alongside Pesona Metro Holdings Bhd, is on the verge of securing a highway concession in the Klang Valley worth over RM2.1bil, marking the start of both companies diversifying their business portfolio away from a heavy reliance on the construction industry.

The highway, with a 55-year concession period, will give both companies recurring income and beef up their order books. The highway is also expected to form the backbone of the return of Putrajaya Perdana as a listed entity to Bursa Malaysia.

Putrajaya Perdana was taken private in 2010 as part of the privatisation of UBG Bhd by Petro Saudi International. Apart from Putrajaya Perdana, UBG was also the parent company of Loh & Loh Corp Bhd. Petro Saudi International is also the same company that had entered into a joint-venture (JV) agreement on an oil and gas venture with 1Malaysia Development Bhd in 2009 for some US$700mil.

Datuk Rosman Abdullah took over Putrajaya Perdana from UBG in 2012 through his private company Cendana Destini Sdn Bhd.

The highway concession will be held through Putrajaya Perdana’s wholly owned subsidiary Putra Perdana Expressways Sdn Bhd, of which some 30% is in the midst of being acquired by Pesona Metro.

Sources added that Pesona Metro would be awarded some 30% of the construction works for this highway concession.

The partnership between Putrajaya Perdana and Pesona Metro is not exactly surprising, considering that there are some key personalities in both companies.

Wie Hock Kiong, a substantial shareholder of Pesona Metro, was the chief executive officer (CEO) of Putrajaya Perdana over the last 13 years until 2013. Subsequently, he went on to become the CEO of one of Putrajaya Perdana’s wholly owned subsidiary, Saluran Arena Sdn Bhd. Saluran Arena is 70%-owned by Putrajaya Perdana and 30%-owned by Hock Kiong.

Hock Kiong and his brother Hock Beng control some 60.83% of Pesona Metro. Hock Beng is the managing director of Pesona Metro, while Hock Kiong is the non-independent non-executive director of the company.

Last Thursday, they increased their stake in the company after puchasing an additional 8.56 million shares in an off-market transaction.

Putrajaya Perdana was incorporated in July 1998, as a corporate JV vehicle for the planning and development of Putrajaya. It has since completed some RM10bil worth of construction and property development jobs over that period.

Over the last few years, it has gone on to build some of government complexes, offices and high-end residential units.

Shares in Pesona have been actively traded over the last few days. Yesterday, it closed at 93 sen, just half-sen higher.

Pesona Metro has been on a roll recently. This year itself has seen the group secure a few sizeable projects. This concession project will mark its largest contract win to date.

Last week, Pesona’s wholly owned subsidiary, Pesona Metro Sdn Bhd, secured an RM267mil contract from PBT Engineering Sdn Bhd, the engineering business unit and part of the construction and building division of TEE International Ltd in Cyberjaya.

The 29-month project involves the execution and completion of building works to develop one 17-floor office block, with eight floors being carpark bays and an office lobby, two blocks of small office, home office units with 30 and 35 floors, respectively, in Cyberjaya.

In February, the company bagged an RM172.73mil contract for roadworks from Gua Musang in Kelantan to Relong in Pahang.

Pesona Metro is actively tendering for new jobs worth RM1bil.

The construction firm’s other projects include the Port Klang bridge, the Election Commission building in Putrajaya, the Government Building Complex in Johor, a hostel for University Malaysia Perlis and high-end service apartment The Mews.