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Tuesday, December 23, 2014

Taliworks takes over New North Klang Straits Bypass Expressway

KUALA LUMPUR (Dec 22): Infrastructure player Taliworks Corp Bhd, via its 75%-owned indirect subsidiary Jejak Melewar Sdn Bhd, has taken over the assets and concession rights to the New North Klang Straits Bypass Expressway (NNKSB) from Lebuhraya Shapadu Sdn Bhd.

The group, through Jejak Melewar, had made a bid in response to an open tender called in September 2012 by the liquidators of Shapadu, and had been in negotiations since last year with the government to take over the concession rights for the NNKSB.

Jejak Melewar today executed the Novation Agreement (NA) to novate, assign and transfer all the concession rights, benefits, interest, duties and obligations from Shapadu, without assuming any of Shapadu’s liabilities.

Following the execution of the NA, Jejak Melewar also executed a Second Supplemental Concession Agreement (SSCA) with the government.

Under the terms of the SSCA, the concession period for Jejak Melewar is 18 years from the date of execution of the SSCA.

Taliworks executive director Lim Yew Boon said the takeover is in line with the group’s strategy to further develop and leverage its infrastructure business by acquiring mature operating assets with stable cash flow in Malaysia and the developed markets.

"We have been successfully operating the Cheras-Kajang toll road through our subsidiary, Cerah Sama Sdn Bhd since 2007. So, we are confident of applying the same principles of effective management to this new concession which will contribute positively to the future earnings of the group,” he said in a statement today.

As the highway links to Port Klang, Taliworks expects the takeover of the concession will generate a valuable new revenue stream, providing a recurring source of income to the group.

The NNKSB is a 17.5km, two-lane dual carriageway highway, which links Northport to Bukit Raja, Klang, and has been operational since 2001.

Taliworks also said it is currently pursuing a strategy to streamline its various business interests, focusing on assets that will provide sustainable revenue streams and enhance its profitability moving forward.

“Based on the annual report of Lembaga Lebuhraya Malaysia which was issued earlier this year, on the whole, there has been a steady positive increase in traffic on most highways driven by rapid population growth and consequently an increase in the number of vehicles in the areas surrounding these throughways," said Lim.

"Add to this the government’s implementation of continuous initiatives to help ease the burden of highway users like a 20% rebate for Class 1 vehicles that pay toll 80 times or more using the Touch n’Go and Smart Tag system in a calendar month, Taliworks believes that the matured concession of the NNKSB is a sound asset investment with minimal operational risk due to the straightforward nature of highway management," he added.

Shares of Taliworks closed up 1.53% at RM1.99 today, bringing a market capitalisation of RM868.62 million.

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