CPPIB looks to acquire 55% stake in Indonesian toll road firm

Jakarta, Indonesia. Photo: Gede Suhendra/unsplash

Canada Pension Plan Investment Board (CPPIB) is bidding to acquire a stake in Indonesian toll road company Lintas Marga Sedaya (LMS) from Malaysia’s UEM Group, two sources familiar with the development told DealStreetAsia.

UEM Group, owned by Khazanah Nasional Berhad, currently holds a 55 per cent stake in LMS through its subsidiary PLUS Expressway International Bhd. Meanwhile, IDX-listed Astra International, through its subsidiary Astratel Nusantara, owns the remaining 45 per cent stake after buying out Bhaskara Utama Sedaya in 2017.

UEM Group is currently working with Evercore as its sell-side advisor on the proposed transaction.

Negotiations are at an advanced stage and the “two parties are in a stage wherein they need to finalize the document reviews,” said one of the sources mentioned above. If talks fructify, the transaction is likely to be closed before the end of 2019.

The Canadian pension fund is understood to be the last bidder of UEM’s stake. Before CPPIB, other parties from Canada and Hong Kong evinced their interest to acquire a stake in LMS.

When contacted, UEM and CPPIB spokespersons declined to comment on the development.

Earlier in June 2019, DealStreetAsia reported on UEM’s plan to divest a part of its ownership in LMS. It was then understood that UEM Group could keep a minority stake in LMS, while Astra International could increase its ownership to 55 per cent by acquiring an additional 10 per cent stake from the former.

However, sources now say that UEM may make a full-exit from LMS considering it may not have an advantage by holding a minority stake. Also, Astratel Nusantara, on its part, may also not need to increase the ownership as after it already operates LMS’ toll road.

Astratel Nusantara is the toll road subsidiary of Indonesia-listed Astra International. As UEM’s partner in LMS, the company plays an important role in the current transaction as it has the right of first refusal (ROFR).

Astratel Nusantara is known to be working closely with UEM to get the deal materialized, as the winner of this process will be its new partner.

Astratel Nusantara’s spokesperson, however, declined to comment on the matter.

LMS holds a 35-year concession to manage the 116.75-kilometre Cipali toll road in West Java Province, which connects Cikopo to Palimanan. The toll road is believed to be the main distribution and transportation route in Java Island, as it is part of the Trans Java Toll Road system which connects the west to the east part of the island.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.