Khazanah exits Java highway ops
Deal is fund’s second major disposal within this week
PETALING JAYA: Marking its second major disposal in a week, Khazanah Nasional Bhd has announced its exit from the Indonesian highway business.
PLUS Expressways International Bhd, which is a subsidiary of the UEM Group and ultimately wholly owned by Khazanah, has sold its entire 55% majority stake in PT Lintas Marga Sedaya (LMS) to the Canada Pension Plan Investment Board (CPPIB) and its partner PT Baskhara Utama Sedaya (BUS).
Both parties, in their statements on the exercise, did not disclose how much the deal was valued at. However, according to previous reports, PLUS Expressways had previously received a Us$500mil (Rm2.1bil) offer for its stake in LMS.
Just a day prior to the announcement – on Tuesday – Khazanah had announced the sale of a hospital in Kuala Lumpur for Rm1.02bil.
Assuming the latest deal was valued at about Rm2.1bil, Khazanah is expected to have made about Rm3bil this week from the backto-back disposals.
UEM Group, in a statement to Starbiz, said part of the proceeds from the sale of the highway business would be used for investments in the development of Malaysia’s key national infrastructure. “The company will also continue to explore other investment opportunities in Indonesia,” it said.
The exercise will see Khazanah disposing of its stake in LMS, which is the concession holder and operator of the 117km long Cikopo-palimanan toll road in West Java – one of the longest operational toll roads in the country.
CPPIB, in a statement yesterday, said it would be jointly acquiring the 55% stake with BUS, and would take on a 45% equity interest in LMS, while BUS’ stake in LMS would increase to 55% from 45% previously.
“Cipali toll road provides CPPIB access to a vital infrastructure development supported by rising motorisation rates in one of the most densely populated and economically productive regions in Indonesia,” said CPPIB managing director, head of infrastructure, Scott Lawrence.
At 117km, the company said the Cipali toll road is a critical link in the transportation network of the island of Java, as part of the Trans Java Toll Road network. It serves as a thoroughfare within West Java, which is Java’s most populous and fastest-growing province, and also connects West Java and suburbs of Jakarta with the rest of Java.
UEM Group, meanwhile, said PLUS Expressways has signed a conditional sales purchase agreement (CSPA) following an offer it had received to acquire the stake from a consortium led by BUS.
It said its strategic and commercial investment in LMS had been fulfilled after investing in the company since 2007.
“As an investment holding company, UEM Group’s focus and strategy has always been to assess investment and/or monetisation opportunities based on set commercial and strategic targets,” it said.
The group said its presence in Indonesia would continue via its subsidiary UEM Edgenta Bhd, which had in July 2019 set up a regional office in Jakarta and is actively pursuing opportunities in project management, road maintenance, healthcare and the asset facilities management services sector.
On Tuesday, Khazanah announced the divestment of its 100% stake in Prince Court Medical Centre Sdn Bhd (PCMC) to its healthcare platform, IHH Healthcare Bhd, for a cash consideration of Rm1.02bil.
The sovereign wealth fund said its wholly owned indirect subsidiary – Pulau Memutik Venture Sdn Bhd (PMV) – had signed a share purchase agreement with Pantai Holdings Sdn Bhd, which in turn is a wholly owned subsidiary of IHH, for the related-party transaction. Khazanah, through PMV, owns a 26.04% stake in IHH.