KUALA LUMPUR: West Coast Expressway Sdn Bhd (WCE) has inked a RM4.74bil loan and debt notes from the Government and local banks to fund its RM5.9bil West Coast Expressway project.
The company, which is 80%-owned by Kumpulan Europlus Bhd (KEuro) has signed a RM2.24bil government support loan facility agreement and RM1.5bil from RHB Investment Bank Bhd, RHB Bank Bhd and Malayan Banking Bhd.
According to a filing with Bursa Malaysia yesterday, WCE has also agreed on a guaranteed sukuk murabahah programme with Bank Pembangunan Malaysia Bhd and RHB Investment Bank Bhd for a RM1bil Islamic medium term notes, to be guaranteed by Bank Pembangunan Malaysia Bhd and Danajamin Nasional Bhd pursuant to a Kafalah facility.
WCE said the remaining RM1.6bil of the fund needed for the project would be sourced via equity financing from its shareholders, namely KEuro and Road Builder (M) Holdings Bhd. “In line with general market practice of greenfield project finance, both shareholders also will take up each other’s required capital contribution in order to ensure there are no funding shortfall to complete the project,” it said.
The highly-anticipated expressway would link Taiping and Banting with three interchanges in Lumut.
The project is a an unincorporated joint venture (JV) between KEuro and IJM Construction Sdn Bhd – on a 30:70 tie-up to govern their relationship as JV partners to secure the construction works from the project.
The JV will undertake the 233km of tolled highway from Banting, Selangor to Taiping as the turnkey/engineering, procurement and construction contractor. Construction is to be carried out for five years.
The low-key KEuro came into focus after it signed a deal to sell 900 million Talam Transform Bhd shares to Tan Sri Chan Ah Chye @ Chan Chong Yoon for RM99mil last year.
StarBiz reported that KEuro’s impending exit from Talam was not surprising as the company that was managed by its largest shareholder, IJM Corp Bhd, was focussed on implementing the West Coast Expressway.
KEuro needed strong shareholders to undertake the multi-billion, 233km highway project, which resulted in the exit of Chan.
KEuro said Talam Transform, being an associate company, had affected its financial performance due to the share of the losses.
For its fourth quarter ended March 31, 2015, KEuro posted a net loss of RM24mil on the back of RM16.3mil revenue.
The loss was mainly due to the provision for impairment on investment in an associate amounting to RM26mil, and impairment on property, plant and equipment amounting to RM9.67mil.
However, it posted a net profit of RM38.1mil for its full year, with RM23mil in revenue.