KUALA LUMPUR, Feb 25 — Shares of Gamuda Bhd dipped in early session today on news that the government has begun talks with the group to acquire four highway concessions it has a majority stake in, with the aim of abolishing toll collections at these highways.
The four highways are Lebuhraya Damansara Puchong (LDP), Sistem Penyuraian Trafik KL Barat (SPRINT), Lebuhraya Shah Alam (Kesas) and SMART Tunnel.
At 10.01am, Gamuda declined 28 sen to RM2.76, with 18.63 million shares changing hands.
Kenanga Research in lauding the government for trying to ease the rakyat’s burden said, the potential privatisation move would allow Gamuda unlock the value in these four concessions as well as to focus on growing its construction and property development businesses.
Recently, Gamuda bagged RM900 million worth of works to construct high-rise residential and additional works from PNB 118.
“Based on our sum-of-parts valuation, we expect Gamuda to fetch RM2.8 billion in divesting all their equity stakes in these four concessions to the government.
“We believe that our expectations are conservative, as we did not factor in the potential extension for Kesas, which is slated to end in 2023,” it said in a note today.
The research firm also expects Gamuda's net gearing to be reduced to 0.22 times in the first quarter of 2019 from 0.58 times.
“But we do not expect any special dividends from this exercise as we believe that the management might utilise the proceeds for reinvestment purposes,” it added.
Kenanga Research is downgrading Gamuda to market perform from outperform rating. — Bernama