PUTRAJAYA has rejected Maju Holdings’ multi-billion ringgit bid to buy highway operator, PLUS Malaysia Bhd, citing risks and uncertainty over the company’s financial standing.

The Najib government revealed this today in a parliamentary reply, months after the bid was made. 

“Due to the risks and uncertainty involved, the government has no plans to divest its stake in PLUS Malaysia Bhd to Maju Holdings,” the Finance Ministry said.

“Although the government welcomes any takeover proposal, it must meet certain requirements,” the Finance Ministry said in a written reply to Hee Loy Sian (Petaling Jaya Selatan-PKR).

Maju Expressway (MEX) owner Abu Sahid Mohamed offered to buy 100% of PLUS, and sources with knowledge of the deal said he planned to freeze toll rates for 20 years until the end of the concession period.

The ministry, however, said the proposal cannot depend solely on maintaining the toll charges over several years and low maintenance costs.

“Any takeover plan must be practical, so it will not end up like Perwaja (Steel), which was privatised but only to be shut down later,” the ministry said.

The new owners must also meet the government’s needs, including operational and financial capabilities for the North-South Expressway, it said.

Hence, any bidder for PLUS must be supported by clear and strong financial sources to withstand any economic shock or foreign exchange volatility, it added.

Last month, Abu Sahid told The Malaysian Insight that he offered RM4 billion cash to take over the RM30 billion in contingent liabilities and to waive the RM1 billion owed to PLUS by the government, which is Putrajaya’s compensation to the highway concessionaire in lieu of a hike freeze until the concession ends in 2038.

PLUS is owned by UEM and with a 51% share and 49% share respectively. UEM is wholly owned by Khazanah Nasional Bhd. The government has a golden share in PLUS.

UEM and EPF acquired PLUS in 2010 and have reaped handsome dividends from the highway operator. 

According to a filling with the Companies Commission of Malaysia, PLUS paid some RM2.85 billion in dividends to its shareholders, UEM and EPF, up until 2015. 

Both UEM and EPF have said they do not intend to sell their stakes in PLUS. – October 31, 2017.