Maju Holdings to absorb RM2.7b toll compensation in PLUS takeover

KUALA LUMPUR (Oct 9): Maju Holdings Sdn Bhd is proposing to absorb the RM2.7 billion in toll compensation owed by the government to PLUS Malaysia Bhd if the company’s acquisition of the country’s largest highway concessionaire goes through.

“The government currently owes PLUS approximately RM2.7 billion in toll compensation, and if Maju Holdings takes over PLUS, we are pleased to inform that we will no longer hold the government responsible for these debts,” it said in a statement today.

It said this would translate into RM2.7 billion savings to the government by virtue of the fact that Maju Holdings would absorb the RM2.7 billion compensation.

“Our enterprise value to purchase PLUS including debt outstanding to bond holders will be RM34.9 billion. This purchase consideration is a reflection of the true and fair value of this company and its assets, taking into consideration our intention to provide Malaysian road users with tangible discounts,” it said.

Maju Holdings is also proposing to reduce toll fares of up to 36 per cent and would not seek financial compensation from the government for the reduction.

Apart from that, the company said it was committed to invest some RM5.3 billion which would include lighting up the entire length of the highway along with other much needed enhancements.

Maju Holdings, which owns Maju Expressway Sdn Bhd, the operator of Maju Expressway (MEX), said with the latest offer, the company was offering the government and existing shareholders of PLUS an estimated total equity Internal Rate of Return of approximately 16 per cent.

“This represents a return that far surpasses the cost of equity for a majority of other toll road concessions, both globally as well as across Southeast Asia,” it said.

The company is also confident that its operational track record in managing the MEX highway would help to reduce the maintenance cost for PLUS.

“We have successfully operated the MEX highway in a highly cost effective manner compared with PLUS toll roads that should benefit from economies of scale. In fact, we have one of the lowest costs per kilometre in the country,” it added.

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