KUALA LUMPUR: A Malaysian-led Hong Kong-based private equity firm, RRJ Capital has laid out a revised proposal to the government to acquire PLUS Malaysia Bhd for RM3.5 billion.
The firm, which manages US$20 billion funds sourced mainly from United States and Middle East, looks to offer toll discounts of up to 30 per cent based on new cars' price tag as well as demolish toll booths to ease traffic congestion.
In the race to own Khazanah Nasional Bhd’s toll concessionaire, RRJ Capital chairman Richard Ong said the ambition was to modernise PLUS into high technology and automated highways.
“When PLUS highway was first built, it was amazing and state of the art in the world. I has no longer been a highway that we are proud of.
“We have been left behind. It is still old-fashioned in a way that there is still toll gate. Anywhere in the world especially in developed countries, they do not have this anymore. The “hardware” is there but not the “software”,” he told thevNew Straits Times.
Ong was referring to bringing smart tolling system, equipped with artificial intelligence that is able to track car plate numbers, to replace the current toll gates where users would have to “slow down to pay for the toll”.
The system can detect whether users, who have to register first for it to work, are qualified for toll discounts, he added.
Under its proposal, Ong said there would be toll reductions of over RM1 billion a year with the discounts based on new cars' prices.
He proposed a 30 per cent toll reduction for new car priced less than RM50,001; 20 per cent for car priced between RM50,000-RM100,000; and 10 per cent for RM101,000-RM150,000 cars.
He pledged there would not be an increase in toll charges throughout the concession period, adding that free tolls would be improbable in order to keep maintenance up to scratch.
Ong said the RM3.5 billion offer price is for the 100 per cent stake in PLUS, currently owned by Khazanah through UEM Group and Employees Provident Fund (EPF).
The price tag would lead to the government’s saving of RM2 billion until 2023, he added. The RM2 billion is to compensate PLUS to maintain toll fees at the current rates.
Ong said RRJ Capital was willing to form a 50:50 partnership with goverment institutional funds or private companies such as Permodalan Nasional Bhd, Retirement Fund Inc or EPF to own and manage PLUS.
Khazanah managing director Datuk Shahril Riza Ridzuan said the group has so far rejected all takeover offers from local and foreign private entities for the country’s largest highway operator.
"There have been many offers from different parties but our reply to all of them has been very simple – we are not interested in selling,” he said in an interview with TV3 aired on Saturday night.
Shahril Riza added that all the offers have been at lower prices than PLUS’ real value.
“If you want to buy (an asset) from the EPF (Employees Provident Fund) or Khazanah, you should offer a fair market price,” he said, adding that the interested parties had proposed using the difference between their offer and PLUS’ real value as toll discounts to the people.
He added that as an investment arm of the government, Khazanah must ensure that strategic assets such as PLUS are not sold to parties whose only interest is in making profits, without considering the needs of the people.
RRJ Capital, founded in March 2011 by Malaysian-born Ong, focuses on private equity investments in China and Southeast Asia.
The firm focuses on growth capital and state-owned enterprises investments.
RRJ Capital is a co-owner of Switzerland-based Gate Gourmet, said to be the world's largest catering company serving airlines.
It is also a key owner of Cheniere Energy Inc, a Houston-based company that owns and runs one of the world's largest liquefied natural gas plants.
RRJ Capital closed its first fund in June 2011 with commitments of US$2.3 billion, its second fund with commitments of US$3.6 billion in April 2013 and its third fund with commitments of US$4.5 billion in September 2015.