IJM ... Oct10

Its moves to increase its stake in Indian toll road concessionaires Swarna Tollway is a sign of bigger things to come.

 

Sources say IJM is looking at listing its infra assets – in India as well as those in Malaysia – in India . The group is also exploring the possibility of a dual listing on Bursa Malaysia . IJM has roped in consultations to make preparations for the listing exercise.

 

It is learnt that IJM is in the midst of consolidating its Indian infra assets. It is looking at buying out the minority shareholders in the JV partnerships.

 

While talk of IJM wanting to carry out an initial public offering of its Indian infra assets has been around for some time, observers say what is new this time is that the group is also looking at the possibility of including its Malaysian assets – three toll concessions and two ports – in the exercise as well.

 

Should it take place, major shareholders, which includes the EPF which owns a 20% stake in IJM, will get to unlock the value of their investments overseas.

 

While two of the Malaysian highways – Besraya Highway and New Pantai Expressway as well as 50% of the partly completed Lebuhraya Kajang-Seremban (LEKAS)– are the main contributors to IJM’s toll road earnings, industry observers say there is also an exciting growth path in its Indian toll concessions.

 

In terms of profit contribution to the group, the infra division has been playing a more prominent role.

 

IJM’s infra assets comprise nine concessions – three in Malaysia , five in India and one in Argentina . It also has two ports – Kuantan Port and Kemaman Port in Terengganu – as well as power plant in India and a water treatment facility in Vietnam .

 

In India , IJM wholly owns the Rewa toll reaod and a 76.4% stake in Swarna toll road which has been operating for six years. IIJM also owned 50% stake in C-V toll road and Trichy toll road, as well as the wholly ownded J-M. The concessions periods range from 16 to 31 years.

 

The group also gas a 20% stake in Grupo Concessionaire, which is listed in BA Stock Exchange. The company operates a 21 year concession of the Western Access-Tollway in BA, Argentina .