Taliworks to look at SILK Highway again

PETALING JAYA: WZ Satu Bhd’s decision to abort its acquisition of the entire stake in Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd (SILK) has paved the way for Taliworks Corp Bhd to revisit its proposal to acquire SILK Highway.
“We are continuously on the lookout for toll road and other infrastructure project opportunities, including SILK, that meet our desired 12% equity IRR (internal rate of return) and dividend yield criteria, that we have announced in the past,” Taliworks executive director Datuk Ronnie Lim Yew Boon told SunBiz yesterday.
He declined to elaborate further.
WZ Satu last Friday said a definitive agreement could not be reached with SILK Holdings Bhd, the parent company of SILK. The deal was potentially worth RM368 million.
In May this year, Taliworks said it was close to concluding a deal to buy SILK Highway. A month later, however, WZ Satu announced that it had entered into an agreement with SILK Holdings.
Taliworks chief investment officer Kevin Chin Soong Jin said then that both parties were in discussions on pricing, given that traffic volumes had gone down after a toll rate increase last October.
“We expect this acquisition to conclude in the next few months ... the outcome is favourable. The motivation for Taliworks to buy and the vendor to sell is there,” Chin had said.
Taliworks has a 51% stake in Cerah Sama Sdn Bhd, the concessionaire for the Cheras-Kajang Highway and the New North Klang Straits Bypass Expressway.
SILK is the concession holder for the 37km Kajang Traffic Dispersal Ring Road, better known as SILK Highway. It has a 33-year concession to operate and maintain the highway. The concession period ends on July 31, 2037.
SILK Holdings has been looking to divest its interest in SILK Highway since June 2014, when it said that proceeds from the sale would help expand its oil and gas support services business.
At that time, SILK Holdings had entered into a heads of agreement with Road Builder (M) Holdings Bhd, a wholly owned subsidiary of IJM Corp Bhd, but the deal fell through due to non-fulfilment of conditions within the agreed timeline.
SILK Holdings shares were unchanged at 36 sen yesterday with 515,500 units traded while Taliworks edged up 1 sen RM1.46 with 141,200 shares done.