Country’s largest fund management company offers RM380mil cash
KUALA LUMPUR: Permodalan Nasional Bhd (PNB) has become the latest suitor of Silk Holdings Bhd’s (SHB) unit Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd, the concession holder of the Kajang Traffic Dispersal Ring Road, known popularly as Silk Highway.
The country’s largest fund management company is making a cash offer of RM380mil, which follows previous attempts to buy the highway operator by IJM Corp Bhd ’s unit Road Builder (M) Holdings Bhd (RM398mil cash offer in 2014) and WZ Satu Bhd (RM368mil offer last year to be satisfied with RM239.25mil cash and WZ Satu shares).
According to a joint statement yesterday, SHB has signed a conditional agreement to dispose of 100% in its sole tolled highway business to PNB, which plans to enhance its existing portfolio of highway infrastructure assets.
PNB, through wholly-owned Projek Lintasan Kota Holdings Sdn Bhd (Prolintas), currently operates three highways: Ampang Kuala Lumpur Elevated Highway, Guthrie Corridor Expressway and Lebuhraya Kemuning Shah Alam.
The 37km Silk Highway, whose toll concession runs until July 31, 2037, will be its longest highway, even after the proposed Sungai Besi-Ulu Kelang Elevated Expressway and Damansara-Shah Alam Elevated Expressway come into operations.
The two companies expect the proposed transaction to be completed within this quarter.
However, the deal will need to get the approval of the holders of Sistem Lingkaran-Lebuhraya Kajang’s RM752mil Islamic bonds, who in the past did not agree to the disposal.
SHB said the Silk Highway operation disposal was in line with its strategy to monetise and unlock value of its infrastructure assets to allow the group to streamline its operations and focus its financial resources on offshore marine support services.
Of the proceeds from the proposed disposal, the SHB group plans to allocate up to RM200mil for future investments, including enhancing and strengthening its existing offshore marine support services business and investing in related businesses in the oil and gas segment as well as other viable investment opportunities to be identified.
SHB intends to distribute a cash dividend of 10 sen per share, or an equivalent of RM70.15mil, to its shareholders and allocate RM110mil for general corporate and working capital, among others.
Besides Road Builder (M) Holdings and WZ Satu, Taliworks Bhd was also reportedly interested in buying Silk Highway two years ago but no deal was struck.
SHB’s highway division - consisting Silk Highway operations - posted a pre-tax loss of RM18.9mil for the period ended Dec 31, 2015 due to high depreciation, amortisation and finance costs.
For the nine months ended Sept 30, 2016, the division chalked up a gross profit of RM87.99mil but after depreciation, amortisation and finance costs, it incurred a net loss of RM6.54mil.
SHB shares were suspended voluntarily from trading yesterday pending the announcement.
The counter closed at 40.5 sen the previous day.