PLUS extends deadline

KUALA LUMPUR: PLUS Expressways Bhd has extended the period to fulfil a condition precedent relating to its takeover by the Employees Provident Fund (EPF) and Khazanah Nasional Bhd via UEM Group Bhd to Sept 30.

Its announcement to Bursa Malaysia did not clearly disclose the condition being extended.

The announcement said: “Certain approvals or consents required to be procured by PLUS and the joint offerors are still pending.” However sources close to the deal explain that this condition entails the toll concession agreement between PLUS and the Government.

When Khazanah and EPF made the offer to acquire the assets and liabilities of PLUS in mid-October last year, the offer was conditional upon a new concession agreement being inked between PLUS and the Government. It had been reported that the PLUS takeover was partly driven by the decision to tweak toll rates.

UEM-EPF made an offer to the board of PLUS to buy the assets and liabilities of PLUS at a price of RM23bil, which works out to RM4.60 per PLUS share.

The proposed sale of PLUS assets received shareholders’ approval in February this year, about four months after it was initially announced, and was indicative that completion of the proposed disposal of assets would be at the end of July.

The amount to be paid for this year’s interim dividend of 15 sen announced on June 29 would be deducted from the final price of which both EPF and Khazanah would pay for PLUS’ assets.

Upon completion, PLUS, which is the operator of North-South Highway, will be a cash-rich company and the cash should be distributed to the shareholders through a proposed special dividend and selective capital reduction as delineated in the offer.

A crucial question, however, is whether PLUS shareholders will receive the capital repayment later than expected. In the original offer document, it was stipulated that shareholders would be paid out in early September this year while PLUS will be delisted by end-September.

The offer document also stated that the new concession agreement would have been finalised by the middle of 2011. Sources close to the deal said the date of capital repayment would be met. However, an investment banker questions why PLUS did not state this clearly in its announcement yesterday.

EPF and Khazanah have stated that they would raise bonds to pay for the acquisition of PLUS’ assets. It should be noted that the raising of the bonds is dependent on the terms of the new concession agreement.

Prior to the announcement of PLUS’ privatisation, the stock had been trading at a narrow band of RM3.30 to RM3.40. PLUS closed on Friday up 4 sen to RM4.56.