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Gamuda recovers after selldown on fears of loss of highway biz to govt

KUALA LUMPUR (Feb 26): Shares of Gamuda Bhd regained some lost ground this morning after the company said it would ensure any takeover of its highway concessions is in line with "market valuation norms and practices".

As at 10.15am, the counter rose one sen or 0.35% to RM2.87. The counter fell 5.92% to close to RM2.86 yesterday following the news of the takeover bid by the federal government.

On Saturday, the Prime Minister's Office issued a statement saying that it has begun talks with Gamuda to negotiate the acquisition of four highway concessions that the group has a majority stake in.

*‘Market valuation norms’ please, Gamuda tells govt

Gamuda subsequently confirmed yesterday that it is in talks with the government.

The highway concessions in discussion are Lebuhraya Damansara Puchong (LDP) and Sistem Penyuraian Trafik KL Barat (SPRINT), which are owned by Gamuda's 43.58%-owned Lingkaran Trans Kota Holdings Bhd (Litrak); 70%-owned Lebuhraya Shah Alam (KESAS); and 50%-owned SMART Tunnel.

Meanwhile, selling pressure on Litrak has not eased. The stock is trading three sen or 1.20% lower at RM4.14.

As for other toll operators, there are mixed reactions.

IJM Corp Bhd, which operates Besraya or Sungai Besi Expressway, New Pantai Expressway, Kajang-Seremban Highway, rose two sen or 1.06% to RM1.90.

However Ekovest Bhd, which operates the DUKE Highway, lost one sen or 1.77% to 55.5 sen.

Yesterday, Prime Minister Tun Dr Mahathir Mohamad told reporters it would be too expensive to cancel all toll rates.

"To cancel all the rates becomes too expensive. We need to buy the tolled road. When you buy, you need to raise money and service the loans that we raise. So we try to reduce the money [costs] we have to pay for acquiring highways. That will go stage by stage and step by step," he said. — theedgemarkets.com

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