KUALA LUMPUR: Ekovest Bhd aims to list its toll concession arm in the third quarter of next year, targeting to raise about RM2 billion to RM3 billion to pare down debts and for working capital.
The group's concession arm owns and operates the Duta-Ulu Kelang Expressway (Duke) comprising Duke 1, 2 and 3.
Duke 1 and 2 are operational, while Duke 3 is under construction and set to collect tolls starting next year.
Chairman Tan Sri Lim Kang Hoo said Ekovest had appointed consultants, lawyers and bankers to prepare for the initial public offering (IPO).
"We target to make a submission to the Securities Commission in the first quarter of next year, and launch the IPO by the third quarter of 2021," Lim told the New Straits Times.
According to Lim, Duke 1 and 2 were generating health cashflows and set to break even next year.
Ekovest's equity investment for Duke 1 and 2 is about RM600 million collectively.
The equity investment for Duke 3 is RM850 million.
Ekovest has todate invested about RM1.5 billon for Duke 1.2 and 3.
In addition to improving connectivity in Kuala Lumpur, the Duke highway disperses traffic from the city to the suburban range through several routes in and out of several branches of the main intersection.
Duke is an elevated highway which has parallel national roads running hence users of Duke are as per usage with parallel connectivity.
Duke 3's main interconnection is with Bandar Malaysia, a massive RM140 billion development project that is due to start next year.
"We are improving connectivity for Duke 1, 2 and 3 to link up to Bandar Malaysia. The elevated connectivity of Duke3 provides the infrastructure connectivity for the development of the underground city for the phase 1 for Bandar Malaysia development.
"Unlocking Ekovest's investment in Duke is part of Ekovest's overall fund raising plan and will eventually reduce the total group debts," Lim said.
He said the current debt for Duke 1 and 2 is around RM2.3 billion.
Duke 3's debt is RM3.7 billion sukuk and RM560 million Reimbursable Interest Assistance (RIA).
The enterprise value for the three highways was about RM11 billion to RM12 billion, he said.
"Twenty-five per cent of the total enterprise value is about RM3 billion and we can raise that amount to pare down the debts and allocate some for working capital purposes.
"By the time we start the Bandar Malaysia project next year, Duke 3 will be at the tail-end of completion. So the timing is just nice to list," Lim said.
The listing of the highway is part of the deal when the Employees Provident Fund (EPF) bought a 40 per cent equity interest valued at RM1.13 billion in Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd (Kesturi).
Kesturi is a wholly-owned subsidiary of Nuzen Corp Sdn Bhd, which in turn, is the wholly-owned subsidiary of Ekovest.
Duke's exit payment condition is either to be listed (on Bursa Malaysia) or trade sale to a third-party to generate a return of at least 11.5 per cent for EPF and Ekovest.