MRCB gains on JB highway takeover (1651)

KUALA LUMPUR: Malaysian Resources Corp Bhd's (MRCB) share price rose
six sen to RM1.75 as at 3.34 pm on news that the government has decided
to take over the Eastern Dipersal Link (EDL) Johor Baharu from the
company.

Minister in the Prime Minister's Department Tan Sri Nor
Mohamed Yakcop said the takeover decision was made by the Cabinet last
month.

The cost and terms of purchase are in discussions and are expected to be known by year-end.

MRCB
had said earlier that the company was open to any options, including
selling the EDL, developed by its wholly-owned subsidiary, MRCB
Lingkaran Selatan Sdn Bhd, to the government in a bid to settle the
toll charges' issue.

HLIB Research has maintained a "buy" call on MRCB's shares, with a target price of RM2.29 based on sum-of-part valuation.

"We
believe that EDL's equity valuation should be worth around RM600
million to RM800 million, depending on traffic projection and discount
rate applied.

"Our valuation for EDL works out to RM581 million, translating to 42 sen per share for MRCB," it said in a research note today.
-- BERNAMA