Khazanah to go by Malaysian govt decision on stake takeover offers for PLUS

The Khazanah Nasional Berhad logo is displayed on a laptop. Photo: Ipsita Ray/DEALSTREETASIA

Malaysia’s sovereign wealth fund Khazanah Nasional Bhd has said it will go by the government’s decision on the various acquisition proposals received by toll road operator PLUS Malaysia Bhd.

Khazanah said, PLUS Malaysia, which has attracted interest from various parties, has submitted its own proposal to the Malaysian government.

“It is up to the Government to consider these proposals and decide what is best for the country and the people,” Khazanah spokesperson Mohd Raslan Md Sharif said in an email response to DealStreetAsia.

Khazanah Nasional, through its 100% owned subsidiary UEM Group Bhd, holds 51 per cent indirect ownership in PLUS while the Employees Provident Fund owns the rest, according to the company’s website.

Integrated facility management and construction Widad Business Group (WBG) is the latest to evince interest in acquiring a stake in PLUS, as reported by The Edge. It joins other potential bidders such as Asian private equity group RRJ Capital and infrastructure firm Maju Holdings Sdn Bhd.

The WBG offer values PLUS Malaysia at around 3 billion ringgit ($714.3 million), translating into 1.5 billion ringgit cash for Khazanah’s ownership in the company.

The company said it has submitted the proposal to Prime Minister Mahathir Mohamad as well as the Ministry of Works and the Ministry of Economic Affairs on October 9, 2019.

Along with the proposal, WBG has offered two options for PLUS. One, it is looking to acquire the stake owned by Khazanah only. Two, it is also open to taking over 100 per cent ownership from Khazanah and EPF.

The company has identified a global strategic partner to support the financing of the proposed acquisition. WBG will also raise capital through its internal accruals and via sukuk and equity issuance.

Once WBG wins the acquisition process, the company plans to reduce the current toll charges by 25% to 40%.

Meanwhile, the other bidder, Maju Holdings also renewed its interest to acquire PLUS’s stake at an enterprise value of 34.9 billion ringgit, as reported by The Edge. The purchase consideration will also include PLUS’s debt to bondholders.

Maju Holdings, which had proposed to acquire PLUS in mid-2017, is also offering to reduce toll charges from 25% to 36% under its current proposal.

Aside from WBG and Maju Holdings, Asian private equity group RRJ Capital and its consortium also proposed to buy PLUS’s stake at 3 billion ringgit enterprise valuation, as earlier reported by Reuters. RRJ Capital plans to cut the toll rates by 20% upon successful acquisition.

Earlier this year, the $39-billion sovereign wealth fund unveiled a refreshed mandate classifying its assets into separate commercial and strategic funds. The commercial fund is an intergenerational wealth fund to meet Khazanah’s commercial objective.

The strategic fund, on the other hand, targets a return of 10-year Malaysian Government Securities yield on a five-year rolling basis and measurable economic benefits. This fund includes strategic assets such as PLUS Malaysia, among others.