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Wednesday, July 30, 2008

Europlus plans RM3b bond sale to fund road project

KUMPULAN Europlus Bhd plans to issue bonds worth about RM3 billion early next year to finance the West Coast Expressway (WCE) project.

Its president and chief executive Tan Sri Chan Ah Chye said the company is working with a local rating agency to raise the money quickly.

Ratings for the debt paper are expected to be finalised within a few weeks and the bonds will be put on sale six months thereafter.

The fund-raising exercise has been delayed because of changes made to the alignment of the road and costing, among other factors.

The 216km expressway will cost about RM4.6 billion. It will stretch from Banting in Selangor to Taiping in Perak.

Chan said that construction cost alone is about RM3.6 billion.

Europlus' 64.2 per cent-owned subsidiary, Konsortium LPB Sdn Bhd (KLPB), was awarded the expressway concession on May 25 last year.

Under the concession agreement, KLPB will build the expressway and can collect toll for 33 years before handing the road back to the government.

The consortium's other shareholders are Kumpulan Darul Ehsan Bhd (20 per cent) and Perak Corp Bhd (20 per cent).

Chan expects the expressway project to begin works next year and to take three years to complete.

Currently, Europlus has two major contracts in hand, including the West Coast Expressway and the Canal City, which has been delayed after the Barisan Nasional lost Selangor in the general election.

Chan said the group will soon meet the new state government to finalise new terms and conditions for the project to continue.

Europlus and construction firm IJM Corp Bhd are joint-venture partners in the project.

On its outlook for the year ending January 31 2009, Chan said he expects Europlus to make a profit now that associate company Talam Corp Bhd's proposed regularisation plan has been approved by the authorities.

In the financial year ended Jan-uary 31 2008, Europlus posted net loss of RM4.5 million on turnover of RM41.1 million.

By New Straits Times (by Rupinder Singh)

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