Thursday June 21, 2012
KPS mulls selling highway stake
By THOMAS HUONG
SHAH ALAM: Kumpulan Perangsang Selangor Bhd (KPS) is looking at a potential sale of its 20% stake in Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd (Sprint), which is the concession holder of the 26.5km Sprint Highway.
“We have not seen any dividends or profitability. Our investment was RM130mil in 2002,” KPS chairman Raja Idris Raja Kamarudin told reporters after the company AGM.
Raja Idris was speaking about unlocking the value of the group's assets in order to reduce liabilities and increase investments in new areas.
“We are looing at all sorts of avenues, whether to divest or for further investments.
“We are talking to some principals,particularly in infrastructure.
“Sprint is one area where we are looking to see how we can unlock ourselves. Moving on in the future, we still cannot see any dividend flow. We have to be very careful,” said Raja Idris.
KPS chief executive officer and managing director Suhaimi Kamaralzaman said: “The problem with the highway business is you invest or borrow lots of money upfront. You see the dividend flow coming in very much at the tail end, because you pay the banks first and all that.
“We expect the dividends in 2018.
“So, we have a long way to go and we have to pare down the borrowings.”
Raja Idris said the group was looking for investments that could provide quick returns, within five to six years. KPS recently announced that it was investing in the liquefied petroleum gas (LPG) distribution business via the proposed acquisition of a 40% stake in NGC Energy Sdn Bhd for RM40mil, as well as making a foray into mobile telecommunications via a proposed RM24.24mil investment for a 30% stake in Ceres Telecom Sdn Bhd.
Ceres Telecom is expected to launch the Virgin Mobile and Friendi mobile prepaid brands in the future.
“We are always looking for new areas of investments, which can give returns in the shortest possible time.
“For NGC Energy and Ceres Telecom, on the basis of the due diligence and the discussions we had, we see that dividends can flow in as early as 2014 and 2015,” said Raja Idris.