What’s Up? IJM Corp/KEuro

IJM Corp/KEuro

What’s Up? … dated Jan 2011

Sources say the long overdue West Coast Expressway (WCE), which will run from Banting, Selangor, to Taiping in Peak, is posed for a financial close.

According to sources, the National Economic Action Council, which is chaired by OM Datuk Seri Najib has approved the project. It is now awaiting approval from the Cabinet.

The sources say the promoter of the project, Konsortium LPB Sdn Bhd has already firmed up the financial close of the project. Some portions of the expressway will be constructed with a soft loan from the government. The government has in principle agreed to the soft loan because some stretches of the highway are not commercially viable.

The highway proposal was mooted some 15 years ago by Tan Sri Chan Ah Chye who established KLPB. KEURO, which is substantially controlled by Tan Sri Chan and IJM Corp, has a 60% stake in KLPB. The remaining 40% is belonged to LTAT and a private company.

Industry observers have described the highway as the closet alternative to the North South Expressway.

In relation to the financial close of the WCE, a new shareholder is likely to emerge in KEuro. The company has placed out new shares amounting to 10% of its capital at rm1.22 per share. The shares are believed to be have taken up by new parties who would also be in the driving seat of the WCE project.

The placement would net KEURO some rm57 million, which would beef up the company’s balance sheet. KEURo has long and short term debts of rm257 million and not much cash in hand.

IJM Corp’s entry into KEURO at some 25 sen per share.