Alamak! Belum cuba belum tahu ke?
It looks like our last post was a tad too early!
Today, we are told, Asas Serba is sticking to their guns!
Does this mean that the Najib Administration is actually even considering them to begin with?
We leave it to you….. but this was carried on Taikors and Taikuns today…
ASAS SERBA STICKS TO BUYOUT OF 23 TOLLED HIGHWAYS
KUALA LUMPUR. Oct 27: Asas Serba Bhd will submit a fresh bid to the government to acquire in one sweep all 23 tolled highways in the country, though pricing of the proposed acquisition is being reworked, its Chief Executive Ibrahim Bidin said.
“We have yet to finalise our offer and the proposal still remains unchanged. The offer is similar as before, that is taking over the country’s tolled highway with the same funding mechanism in cash and bonds,” Ibrahim Bidin said
The bid to take over the 23 tolled expressways includes the four currently operated by PLUS Expressways Bhd for which UEM Group Bhd and the Employees Provident Fund have offered to acquire at RM4.60 per share, valuing PLUS at RM23 billion.
Head of Kenanga Research Yeonzon Yeow said Asas Serba’s proposal is likely to be rejected by key PLUS shareholders since the controlling majority is made up of Khazanah UEM and EPF, who between them control 68%.
While unveiling Budget 2010, the Prime Minister announced there will be no toll rate hikes in the next five years on highways operated by PLUS Expressways Bhd. The move is aimed at rationalising toll structures in the country to benefit all stakeholders and reduce the burden of the rakyat
Yeow went on to say it makes little sense for PLUS to consider Asas Serba’s impending proposal after UEM and EPF had forged ahead with a special purpose vehicle to take over the highway operator. “Although the board is likely to evaluate all bids, the bids have to be credible.”
Meanwhile, an investment banker said for Asas Serba to make a counter-offer that makes sense, it needs to better the current cash offer of RM4.60 a share.
“Asas Serba does not have any PLUS shares, so this means they need to raise more than RM23 billion against a competing offer of RM4.60 by UEM and EPF. On the other hand, to take out the minorities, UEM and EPF would only need to raise RM11 billion and considering the nature of who they are, it is not a problem,” he said.
On whether Asas Serba will be increasing the offer price of RM4.60, Ibrahim Bidin declined to answer.
As to its ability to raise the RM50 billion it has offered the government for all the country’s tolled highways, the investment banker said, ”The Malaysian government raises about RM50 billion in bonds annually and for a company with no track record to do likewise is next to impossible.
“Let’s use another measure. The two largest banks, Maybank and CIMB, have a loan book of RM206 billion and RM142 billion respectively. Asas Serba’s funding needs would amount for 10% of their combined loan book.”
He added that EPF has the strongest financial resource in the country and its partnership with UEM is more appealing to bankers and the government alike.
On the viability of Asas Serbas’ proposal, the banker said that PLUS’ current revenue net of compensation is RM2,366 million. “Its cash operating expense accounts for 25% of revenues, its interest payment on its existing debts amount 30%, capital expenditure 30%. So if you cut revenues by 20%, how would it be able to repay its existing debts,” he asked.
A search with the Companies Commission shows Asas Serba financials recording a pre-tax loss RM6,511 against the absence of any revenue. It has a share capital of RM10,000 against current assets of RM7,746.
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