IJM Corp Bhd had been appointed as the main contractor to reactivate works on the RM840 million Kajang-Seremban Highway.
The highway concession is now held by Lebuhraya Kajang- Seremban Sdn Bhd (LEKAS), of which IJM holds a 50 per cent stake in the company and the rest held by joint-venture partners Kaseh Lebuh Raya Sdn Bhd, Tunku Naquiyuddin Tuanku Ja'afar and Bumiputera institutions.
The concession was initially given to Kaseh in 1997, but was later put on hold due to difficulties in obtaining funding as a result of the Asian financial crisis.
To fund the project, IJM managing director Datuk Krishnan Tan said the group, together with its partners, plans to raise RM750 million local currency bonds within the next three months.
He said the company has been talking to several investment banks to help with the fund-raising exercise.
"There would not be a problem raising the debt because IJM has a decent name and the project has got a decent rating," he told reporters after the signing ceremony for the privatisation of the Kajang-Seremban Highway in Kuala Lumpur yesterday.
The ceremony was witnessed by Works Minister Datuk Seri S. Samy Vellu.
LEKAS, incorporated on June 22 last year, was intended to be a special purpose vehicle to undertake the concession.
With a concession period of 32.5 years, the project, comprising a 48km three-lane dual carriage highway between Kajang and Seremban, is scheduled to be completed within 33 months.
The Kajang-Seremban Highway contract will be IJM's first road concession project in Malaysia.
The group has several road concessions abroad, namely in India, China and Argentina.
IJM expects the Kajang-Seremban concession to start contributing positively to the group's earnings in 2014.
Meanwhile, on IJM's bid to take over rival Road Builders (M) Holdings Bhd (RBH) for RM1.56 billion, Tan said RBH is now in the process of making the recommendation to its shareholders.
"We are now waiting to get the approvals from RBH shareholders as well as the regulators," Tan said.
Tan said IJM's offer for RBH was final. "I think we have made a good offer. I don't think we will be increasing the offer price," he said.
By Anna Maria Samsudin
November 9 2006
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