IJM backs out of deal to buy Malaysian road operator SILK

IJM, one of Malaysia’s largest construction conglomerates, has bailed out of a deal to buy the highways concession business SILK. SILK Holdings, owner of the subsidiary SILK, Sistem Lingkaran-Lebuhraya Kajang, and IJM agreed to end the US$118 million takeover deal that was announced in June, the Sun newspaper reported. SILK holds the concession for the 37km Kajang Traffic Dispersal Ring Road, also called the Silk Highway, until 2037. The road opened in 2004. IJM noted in June, in its filing of intention
November 25, 2014 Read time: 2 mins
5375 IJM, one of Malaysia’s largest construction conglomerates, has bailed out of a deal to buy the highways concession business SILK.

SILK Holdings, owner of the subsidiary SILK, Sistem Lingkaran-Lebuhraya Kajang, and IJM agreed to end the US$118 million takeover deal that was announced in June, the %$Linker: 2 External <?xml version="1.0" encoding="utf-16"?><dictionary /> 0 0 0 oLinkExternal Sun newspaper reported Visit Sun page false http://www.thesundaily.my/news/1236429 false false%>.

SILK holds the concession for the 37km Kajang Traffic Dispersal Ring Road, also called the Silk Highway, until 2037. The road opened in 2004.

IJM noted in June, in its filing of intention to the Malaysia Bourse, that the acquisition of SILK by the IJM subsidiary Road Builder was in line with the group’s strategy to boost its recurring income by expanding concession assets.

IJM already operates two major motorway toll roads in the greater Kuala Lumpur capital city region, the 28km Besraya Highway and the new 20km Pantai Expressway. IJM is based in the state of Selangor, which surrounds Kuala Lumpur on the Malaysian Peninsula’s west coast.

SILK will refund to Road Builder the deposit together with all interest accrued, tehk Sun report noted.

In March 2013, IJM sold its 36% stake in the Trichy Tollway in India for around $15 million and disposed 40% of its equity interest in Kuantan Port, on the eastern seaboard of Peninsular Malaysia, to China’s Guangxi Beibu Gulf International Port Group, according to the company.

The infrastructure business contributed to about 10 percent of total revenue in 2012, according to data compiled by %$Linker: 2 External <?xml version="1.0" encoding="utf-16"?><dictionary /> 0 0 0 oLinkExternal Bloomberg news agency Visit ijm considers listing business trust to boost value of stock page false http://www.bloomberg.com/news/2013-08-20/ijm-considers-listing-business-trust-to-boost-value-of-stock.html false false%> in a report in August 2013.

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