Better for gov't to take over Plus/ 国有化南北大道建议书

Adapted from Malaysiakini.com

By YB Chua Tee Yong

CHUA TEE YONG is the MCA member of parliament for Labis. A chartered accountant, he is former chief financial officer of a government-linked company.

UEM Group Berhad, the toll concessionaire for Plus, is a wholly-owned subsidiary of Khazanah Nasional Berhad. Taking into account Employees Providence Fund (EPF) and Khazanah, the government has an effective interest of 74% in Plus.

Assuming the shareholding structure of the government agencies remains and no additional Plus shares has been issued or converted from bonds, the number of shares in the open market or free float shares amounts to approximately 1,297,514,414 (round up 1.3 billion shares).


Based on the price chart, the highest closing price for Plus has been below RM3.40. Assuming a share price of RM3.50 to RM4.00 per share is offered for the acquisition of the remainder shares, the total acquisition price is between RM4.55 billion to RM5.2 billion.

The offer price is 21% to 38% higher than Feb 10 closing price of RM2.90 and 3% to 18% higher than the highest closing price for Plus.

With the acquisition of the remaining shares from the open market, Plus would be delisted as it would not meet Bursa Malaysia’s listing requirements. The remaining shares could be acquired via Khazanah or UEM, and it should not be difficult to obtain a waiver from acquiring the 10% stake from EPF.

Upon completion, Plus is effectively ‘nationalised’ as the government would hold 90% stake, while the public through EPF would hold 10% stake.

Here are the advantages for such an acquisition:

Good returns and avoid ‘leakages’

Based on the recent review of the toll agreement, there have been numerous claims that the agreement is lopsided and only beneficial to the toll concessionaire. Through the takeover of Plus, the government and EPF would be the ultimate beneficiary. Dividend income or revenue sharing to be received could then form part of the government’s operating budget, or a similar structure to PETRONAS could be established. 



The accumulated profit before tax from financial year 2004 to 2007 is RM4.26 billion, and RM2.08 billion if toll compensations are excluded. Based on media reports, the total cost of construction for the Plus highway is RM5.94 billion. In short, the return on the highway to Plus is 71% (profit before tax/total construction cost) when the toll compensation is included and 35% if the toll compensation is excluded translating into average return of 17.75% per annum, or 8.7% per annum for the latter, during the four-year period.

Analysing the return on equity (ROE) (profit before tax/shareholders equity) would indicate that the business is viable as the ROE is ranging from 22% to 24% inclusive of toll compensation and 10% to 13% if toll compensation is excluded. Profit before tax is used in the calculation for easier computation as income generated through the concession is tax exempt hence taxation has minimal impact.



As Plus is guaranteed to be profitable through the various terms and compensation, the acquisition of the remaining shares would not be detrimental to the government. Currently the benefits of Plus is also shared with 25% minority shareholders and any major decision taken would require the board to take into consideration the welfare of the minority shareholders.



No need for toll hike every 3 years



The concession agreement was signed in 1988 and it is for 50 years, ending in 2038 unless there are extensions.

The toll rate currently is set at 14.96 sen per km and by 2038 the toll rate is expected to double to 29.16 sen per km. As Plus is listed and have minority shareholders, waiver or reduction of contracted toll increase would pose some problems.

Furthermore, Plus is expected to increase the toll rate in January 2009 and if the toll is not increased, the compensation expected to be paid by the government is approximately RM180 million.



However, with the acquisition of the remaining free float shares from the market, the shareholders of Plus would comprise of the government and EPF. With only two parties holding the stake in Plus, the impending decision of toll increase every three years can be waived or minimised.



From the financial aspect, if you analyse the profit-and-loss statement of Plus for the financial year 2004 to 2007, it indicates that Plus have generated a profit of RM400 million to RM600 million yearly even if the gross compensation from the government for not increasing the toll is excluded.



Meanwhile, the cash flow generated from operations excluding any receipt from government compensation for not increasing the toll is RM1.1 billion to RM1.4 billion yearly from 2004 to 2007.

This clearly shows that if Plus is taken over by the government and EPF, the possibility of waiving toll increase can be carried out both financially or legally. Even if there is a toll increase, it would not be based on contractual rates but more to sustain operations of the company and for loan repayment purposes.



How compensation owed to PLUS could be used



The latest quarterly reporting figures show that the government owes Plus RM1.7 billion as at Sept 30, 2008. If the amount is being fully paid, the government has a few options:

1) The amount can be used to pare down debt and hence reduce interest cost. Any savings in interest cost can be channelled back to reduce debt. Based on the financial results for Sept 30, 2008, the calculated interest rate per annum is approximately 6%. The expected interest savings is RM105 million yearly if the amount received is channelled towards repayment of debts.

2) Distributing the repayment of RM1.7 billion to shareholders of Plus. The distribution through dividend or capital repayment based on the new shareholdings structure would be RM1.5 billion to the government and RM170 million to EPF.

The dividend received would reduce the acquisition price of the government to RM3.02 billion (RM4.55 billion - RM1.53 billion) assuming offer price RM3.50 per share and the bumper payment of RM170 million to EPF can be distributed to the contributors.



Lower toll rates possible in future



As at Sept 30, 2008, the long-term borrowings of PLUS amounts to RM9.4 billion and the dividend announced for financial year 2007 is RM700 million. If yearly dividend announced and received is assumed to RM700 million and the entire amount is channelled for repayment of debts, PLUS can settle the long-term borrowing in 14 years based on this financial results. There should not be any problems on short-term borrowings as the cash and cash equivalent of the company as at Sept 30, 2008 is RM2 billion while the current liabilities is RM1.3 billion. 



With the reduction in borrowings, the cash flow savings and expenses is estimated to RM454 million yearly based on 2007 financial figures. This would reduce the cost of operations of Plus and hence a reduction of toll fee is possible. 



Easier implementation of ‘people friendly’ measures 



As the shareholders are only the government and EPF, decision making would be faster and new measures can be implemented to assist the people:

a) Providing a SmartTAG with Touch ’n Go card for every vehicle.

The cost of each SmartTAG with Touch ’n Go card is assumed to be at RM75 and the deposit for the tag is RM20. The initial capital cost for providing SmartTAG would be high but if the distribution is done in stages, this would alleviate the strain on the company.

The implementation of all lanes using SmartTAG would also reduce the company’s staff cost and overhead (air conditioning at workplace, cashier machine) for ticket collection and receipt of money. The staff can be transferred to other departments like setting up top-up counters at rest stops for easy reload or for administrative work.



In the long run, it would beneficial for the company as providing the SmartTAG would be ‘one-off expense’.

Assuming there are 15 million registered vehicles on the road and if vehicles maintains an average balance of RM50 monthly, the total amount cash in advance received by Plus would be approximately RM750million!

Not only this improves the cashflow of Plus, on a daily basis the company would be able to earn interest income of approximately RM61,000, or RM1.8 million per month, assuming interest rate is 3% per annum.


b) Providing discount during non-peak periods

Plus has announced some travel incentive package effective Jan 1, 2009, which includes a 10%+10% discount for off-peak travel during festive season and travelling done between midnight and 7am as well as a 5% rebate for heavy electronic toll-payment users. The expressways involved are NSE, NKVE, FHR2, SPDH and Elite. Calculations by Aseambankers indicate minimal impact from these incentives. As it is only for a two-year period, total earnings loss is about RM40 million. The 5% rebate would translate into a “revenue loss” of just RM2.6 million annually.


Hence, as a gesture of goodwill, with the takeover of Plus, the government could vary the discount provided or offer more incentive accordingly to control traffic during festive period instead of limiting only to midnight which has poses many health, security and safety issues. 


c) More efficient tag reader and tag lanes

With SmartTAG being the official tag reader for all highways, it is still a puzzle that a lot of road users find the tag still prone to error reading which cause long queues, especially during peak hours.

Some funds should be allocated to provide SmartTAG readers and SmartTAG lane that are both efficient and effective similar to Singapore and London, whereby cars do not need to slow down to enable the tag to respond.

We are always proud of Malaysia’s technological advancement hence problems like this should not exist and should have been resolved especially since SmartTAG is the designated tag used for all highways.



Summary

In summary, by acquiring the remaining shares of Plus, the government and EPF being the shareholder of Plus would be able to establish policies and measures to ensure that the rakyat are not burdened due to legal requirements and avoid the government from incurring additional toll compensation every three years.

Politically it would create transparency and at the same time mitigate some of lopsided terms in the concessionaire agreement.


(The full proposal for the proposed idea of takeover has been presented by YB Chua to MCA Presidential Committee on 3 March, 2009. Read full proposal at http://chuateeyonglabis.blogspot.com)

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马友乃德集团有限公司是国库控股有限公司的独资子公司，加上同属政府机构的公积金局和国库控股所拥有的股份，目前政府在南北大道公司拥有74%股权。

假设政府机构在南北大道公司拥有的股权结构维持不变以及PLUS没有额外发出新股股或从债券转换增加新股，,那么在公开市场自由浮动的股票约为1,297,514,414（总计13亿股） 。

根据过去8年的闭市股价记录，南北大道公司的最高收盘价从不高过3令吉40仙 。假设献议收购所有在公开市场自由浮动股票的价位为每股3令吉50仙至4令吉，那么收购总额为45亿5千万至52亿令吉之间。该收购价格比南北大道公司在2009年2月10日收盘时报的2令吉90仙高出21至38％,甚至比南北大道公司过去8年来的最高收盘价高出3至18％。

一旦完成收购，南北大道公司 90 ％的股份将归政府拥有，公众则通过公积金局持有另外10 ％的股份。

收购的有利因素:

1.优渥回酬，避免“疏漏”
根据最近公开的大道合约，有不少看法指责合约只对特许经营者有利。一旦完成收购，政府和公积金局将是最终受益者。相关的股息收入或均分收入可作为政府行政开销。

南北大道公司2004至2007年的税前盈利是42亿6千万令吉，扣除赔偿后则是20亿800万。根据媒体报道，南北大道的总建筑成本是59亿4千万令吉。简单来说，假如违约的赔偿金一起计算在内，南北大道路费的回酬是71％（税前盈利除总建筑成本），扣除违约的赔偿后还可取得35 ％回酬，平均每年的回酬为17.75 ％ 或在扣除违约的赔偿后，过去4年也取得平均每年8.7 ％回酬 。

南北大道公司的股本回报分析显示，这门生意是可行的，因为扣除大道赔偿前的股本回报率是22 ％至24 ％ ，而扣除大道收费赔偿后也有10 ％至13 ％股本回报率。

南北大道合约的各项条件和赔偿机制让该公司能取得保证盈利，因此收购剩余的股份并不会为政府带来不利。此外，南北大道公司目前有25％的少数股东，在做任何重大决定之前，公司都必须考虑和照顾这些少数股东的利益。


2．可减少甚至取消每3年调涨收费的要求

现有的大道经营合约是在1988年签署，有效期为50年，除非有关当局获得延长，否则合约将在2038年终止。目前的过路收费率定为每公里14.96仙，到了2038年预计会增加一倍，达到每公里29.16仙。

由于南北大道公司乃上市公司，而且有部分少数股东，因此取消或减少过路费会引起一些问题。另外，南北大道公司也预定在今年1月调涨过路费，如果不调涨预定的路费，政府将需要赔偿约1亿8千万令吉。

然而，只要完成收购行动，政府和公积金局就是南北大道公司唯一的两个股东。这表示，它们可全权决定减少或取消每3年调涨大道收费的措施。在财务方面，南北大道公司2004至2007财政年的盈亏报告清楚标明，即使扣除政府不批准涨价而作出的赔偿总额后，南北大道公司每年已赚取4亿至6亿令吉的盈利。而公司在同期的流动现金，不包括政府赔偿金每年也高达11亿至14亿令吉。

这清楚显示，如果政府和公积金局接管及拥有南北大道公司，在财务及法律上都增強取消过路费调涨的可能性。即使有任何的调涨，也不需遵照合约所规定的调率。

3．赔偿南北大道公司的数项方法

最新的季度报告显示，截至2008年9月30日，政府尚欠南北大道公司17亿令吉。悉数偿还后，政府作为南北大道公司最大股东，可以选择以下其中一项来善用17亿令吉还款：

~将17亿令吉用来削减公司的债务，从而减少利息成本，省下的利息成本可用来减少债务。若以公司2008年9月30日的财务状况来计算，每年的利息大约是6 ％ 。如果用这笔钱來缴付债务，就可省下1亿500万令吉的利息。

~将17亿令吉用来分发股息。若以股息或资本偿还的方式分发，在新的股权结构下，拥有最多股份的政府可得到的股息是15亿令吉，公积金局则获得2亿令吉。假设献议收购价格是每股3令吉50仙，政府通过上述方式所获得的股息，有助降低其收购成本至30亿2千万令吉 (RM4.55billion – RM1.53billion)，而剩下的1亿7千万令吉可以分发给公积金局的会员。

4．未来或减少过路费的可能性

截至2008年9月30日，南北大道公司的长期负债额为94亿令吉，2007年财政年宣布的股息是7亿令吉。我们以2008年9月30日的财务报告为准，假设每年宣布及收到的股息是7亿令吉，如果将这笔钱用來偿还债务，那么南北大道公司将可在14年缴淸这笔长期债务。此外，公司同年的财务报告也显示拥有20亿令吉及等值的资金而流动负债则只达1亿3千万，因此要进行(还清)短期借貸不会有大问题。

随着减少贷款，根据2007年的财务数据，公司每年可撙节出4亿5千400万令吉。这有助降低南北大道公司的运营成本，所以减少过路费是有可能落实的。


5．惠民亲民措施更易落实

由于至于政府和公积金局两个股东，因此决策速度更快，更能实行新措施以协助人民：

a)设定最低抵押金，为每部车子提供精明通行器和一触即通卡。

我们预计每个附有一触即通卡的精明通行器的成本是75令吉，而抵押金是20令吉，提供精明通行器的初始成本可能较高，但若分阶段进行反将减轻公司的压力与此同时，此措施也能减少公司的人资成本及开支如工作场所冷氣设备、收銀机等，然后把相关的工作人员转移其他部门，例如在休息站设立加额柜台，或处理行政工作。长远來看，提供精明通行器有利公司的盈收.

如果有1千500万辆车子注册上路，如果每辆车子平均每月保持着50令吉余额，这意味着南北大道公司每年预先收取的现金总额为7亿5千万令吉 ！ 这不仅能改善公司的流动现金，若以3％年利率计算，南北大道公司每月还能赚取月180万令吉的存息.


b）白天非繁忙时段提供折扣优惠

南北大道公司于2009年1月1日宣布了一系列的优惠配套，其中包括佳节期间非繁忙时段，以及午夜至清晨7时行车可享有10 ％+10 ％的过路费折扣。电子付费频用者则享有5 ％的回扣。提供上述优惠的高速公路包括南北大道（NSE）、新巴生河流域大道（NKVE）、联邦大道第二阶段（FH-R2），芙波大道（SPDH）以及宜利大道（ELITE）。根据亚欧美证券银行的计算，这些优惠的影响微乎其微，因为只为期两年期间，总收入( 盈利) 损失约4千万, 其中 5 ％的回扣将转化为每年只是260万的“收入损失”。

因此，在接管南北大道公司后为表善意，政府可以提供各项折扣优惠，或提供更多的奖励措施，以控制佳节期间的车流量。目前午夜行驶的路费优惠并不足够，而且还引起许多健康和安全问题的议论。

c）设立更多有效运作的精明卡车道及阅读器

目前，精明通行器或精明卡（smart tag）已在所有高速大道通用，但却经常发生精明卡阅读器在交通繁忙时段出现故障而导致大排长龙，让用户大吐苦水。因此，公司应拨出一笔资金，加固阅读器及精明卡车道的效率，以期达到新加坡和伦敦系统的稳定性，车子在无需减速情况下供阅读器扫读。

我们一直都以大马来西亚的科技进步感到自豪，因此，这类问题不应产生，更何况精明卡是我国所有高速大道指定的通行卡。

总结

总而言之，若政府收购南北大道公司，通过制定利民政策和措施，将能减低人民的负担，政府也无需承担额外的合约赔偿开销。从政治角度来看，此举可以使大道营运透明化，同时减少合约中的偏袒条件。

(上述译本取自“建议政府收购PLUS献议报告”。该报告已由蔡智勇国会议员本人，于3月3日向马华会长理事会成员提呈及做详细解说。)