All about PLUS and offers on the table

THE prized highways operated by Plus Malaysia Bhd (PMB) have attracted several suitors in recent months. The suitors have submitted their official bids to acquire PMB from its owners, Khazanah Nasional Bhd and the Employees Provident Fund (EPF), and the government says it is still studying the offers.

The Prime Minister, however, says none of the offers so far, are “interesting”. He says it would be preferable for the private sector to takeover the assets, as the government does not want to be involved in business. At the same time, he says, the government is still studying its options - whether to sell the highways assets, or to maintain its ownership.

Politicians, economists and analysts also appear to be mixed in their opinions on this. While some believe the business should be transferred to the private sector, others feel it would be too risky and complicated. Given the strategic importance of the highways to the country, it is crucial that the private company that takes over the assets, does not fail.

Otherwise, the government will have to step in to bail out the company, utilising taxpayers’ funds.experts say an attractive offer would be one that is at enterprise value - taking on PMB’S equity as well as it debts. There is also the issue of toll, whereby the government has promised to lower toll rates starting next year.

The companies bidding to takeover the assets are also proposing ways to accomplish this. Finance Minister Lim Guan Eng, during the recent tabling of Budget 2020, said the toll rate would be reduced by an average of 18%, saving some Rm43bil for highway users until 2038 when the tenure of the PLUS concession ends.

PMB is the largest toll expressway operator in Malaysia and one of the largest in South East Asia. It runs seven expressways across the country, including the lucrative 748km North South Expressway. Here is a snapshot of the offers for PMB that have been submitted so far.