A company called Asas Serba Sdn Bhd today revealed that they intend to finance a proposed RM50 billion takeover of all toll highways nationwide via the issuance of dividend bonds through a new concession company. Is there a catch somewhere?
Company officials said shareholders could subscribe the required equity value of up to ten per cent of acquisition costs and dividend bonds would be issued with tenures based on projected cash flow statements of the existing toll concessionaires.
“The reason why we opted for dividend bonds is because we are looking at the possibility of allowing the bond holder also to share the upside of what we will gain from the whole operation of the new concession company,” said CEO Ibrahim Bidin.
“The existing lenders can also opt to stay. They may maintain whatever debt they hold against the toll road companies.”
He added that he would let the public decide if this proposed structured was attractive enough.
“We have the structure on how we’re going to finance, how we’re going to do it... let the public judge whether it is viable or not.”
“It’s a PFI (privately funded initiative). There’s no government [funding]... It’s quite straightforward.”,” he added.
Ibrahim, who was the former CEO of Plus Highways, explained that he plans to achieve the proposed 20 per cent reduction in toll rates by making concessionaires operate more efficiently and claims he can keep it frozen at that level until 2038.
“We will streamline the operation. We will make them more cost-effective in their operations,” he said.
“When you consolidate there are savings... I don’t need to have 10 departments, for example, to do the same thing.”
He added that aside from lowering costs he was also looking at options to increase non-toll revenues, which were not subject to government approval.
“We also have to increase the revenue, not only [reductions] on the cost side. We have to look at both.”
However, he declined to comment further on what these non-toll revenues were.
“I cannot tell you exactly where and how because then our ideas will not be our ideas anymore,” he said, but clarified that these revenue streams “will not be away from the business of the toll road operation”.
Ibrahim sidestepped the issue when asked to respond to DAP MP Tony Pua’s claims that Asas Serba represents a return to Mahathir-era cronyism given allegations that the company is linked to Tan Sri Halim Saad and Tun Daim Zainuddin.
“Number one, it’s not going to be owned by any individual. The shareholdings will be open to several entities,” he said.
“As I said earlier, we are talking to institutions. We don’t talk to individuals only. So it’s not [as though] one individual will own the expressway.
“And you have dividend bond holders who will dictate based on the terms and conditions of the bond. So I don’t see that return to cronyism is an issue.
“It’s not going to be Ibrahim Bidin owning the whole expressway. It’s not going to be... my highway.”
Asas Serba sent their proposal to the Prime Minister, the Deputy Prime Minister and the Finance and Works Ministers last year but has yet to receive an official response from the government.
Khazanah managing director Tan Sri Azman Mokhtar poured cold water on sell down speculation in January when he said the state investment arm would keep Plus Highways as one of its core assets.
“The government has not said yes or no,” said Ibrahim.
Datuk Syed Amin Al-Jeffri, chairman and shareholder of Asas Serba, refused to speculate on why the government has not gotten back to them.
“I’m sure PM (Datuk Seri Najib Razak), he must have got his own timetable and how he wants to approach this,” he said.
He did, however, stress that Asas Serba could not proceed without government go-ahead as the highways were a matter of national interest.
“And naturally, when you talk of national interest, the government is the first area that you have got to clear. It is a hurdle. You must clear the hurdle.
“If the government were to tell us [this] has nothing to do with us, you go ahead and talk to operators, we will do so. But that’s not the case.”
So, what else is new with government?
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