Gamuda launches takeover of Kesas Holdings

KUALA LUMPUR: Gamuda Bhd has made an offer to buy out highway concessionaire, Kesas Holdings Bhd, for RM875 million cash.

Gamuda announced to Bursa Malaysia on Monday that it has offered to buy the remaining 70% equity interest, which the group does not own, from the other three shareholders, namely Perbadanan Kemajuan Negeri Selangor (PKNS), Permodalan Nasional Bhd (PNB) and Amcorp Properties Bhd.

PKNS holds a 30% stake in Kesas Holdings while PNB and Amcorp each holds a 20% stake in the toll road operator.

In a filing with Bursa Malaysia, Gamuda said it would purchase PKNS’ stake in Kesas Holdings for RM375 million cash, while PNB and Amcorp’s stakes will be bought for RM250 million each.  

Kesas Holdings owns and operates Lebuh Raya Shah Alam (LSA), which is better known as the Kesas Highway. Constructed in 1994, LSA was divided into two phases, Package A and Package B, with a total length of 34.5km. Package A (from Sri Petaling to the Seafield interchange linking KLIA) was opened to traffic in December 1996 about four months ahead of schedule. Package B (from the Seafield interchange to Pandamaran interchange) was opened to traffic in April 1998 as scheduled.

Gamuda, the largest intra-urban expressway concessionaire, built, operated and maintained the Shah Alam Expressway, Damansara-Puchong Highway and Sprint Highway.

Revenue from water and expressway concessions for Gamuda for the financial year ended July 31, 2013 amounted to RM121.9 million. Assets for the segment amounted to RM550.7 million with liabilities of RM222.2 million.

However, Gamuda did not reveal how the group would finance the proposed acquisition, and neither did it inform its shareholders of its rationale.

As at July 31, 2013, Gamuda had cash and bank balances of RM1.23 billion, and total borrowings of RM2.458 billion, including short-term debts of RM741.4 million. This translates into a net debt position of RM1.258 billion.

Earlier in March, Gamuda said it was open to selling its 40% stake in Syarikat Pengeluar Air Sungai Selangor (Splash) to the Selangor government’s investment holding company, Kumpulan Darul Ehsan Bhd, for RM734 million.

Gamuda also has a 40-year concession to operate and maintain the Stormwater Management and Road Tunnel (SMART), a flood mitigation and traffic alleviation project in Kuala Lumpur.

In India, Gamuda maintains 130km of inter-city highways in West Bengal under a 15-year concession with the National Highway Authority of India.

This article first appeared in The Edge Financial Daily, on November 06, 2013.